MADRID: Spain's Bankia said Thursday its 2020 net profit plummeted by nearly 60 percent after setting aside more than half a billion euros to cope with the fallout from the coronavirus crisis.

The bank, which is in the process of merging with its larger rival CaixaBank to create Spain's biggest domestic lender, said profits fell 57.6 percent to 230 million euros ($278 million) last year.

The bank said it had set aside 505 million euros to strengthen solvency against an increase in bad loans due to the economic fallout of the pandemic.

"The aim of these extraordinary provisions was to further strengthen the bank's balance sheet," Bankia said.

Most of Europe's banks have taken similar steps in recent months as fears grow that many individuals and businesses will be unable to repay their loans due to soaring unemployment and bankruptcies caused by the economic crisis.

In the fourth quarter, the bank posted a net profit of 50 million euros, well above the EUR32 million forecast by analysts.

Over the year, Bankia said it had granted 11 billion euros in credit to companies in the form of state-guaranteed loans under a programme unveiled by the government of Socialist Prime Minister Pedro Sanchez to counter the effects of the pandemic.

It also granted repayment moratoriums for 49,000 mortgages and 61,500 consumer loans.