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Bankinter reports drop in profits

Source: Bloomberg - Fri 22th Oct 2010

Spain's Bankinter SA yesterday reported a change of management, following a third-quarter fall of 34 percent in profits as lending revenue declined.

Their net income fell to 43.8 million euros from 66.2 million euros a year previously, they announced in a filing to regulators today.

Bankinter, which does two-thirds of its lending for home loans, is fighting a fall in profits as it re-prices loans to reflect a plunge in interest rates while its own funding costs stay high. The bank said yesterday that Jaime Echegoyen, its chief executive officer for the past eight years, would step down and that Vice-Chairman Alfonso Botin would assume executive responsibility for strategy.

Net interest income plunged 40 percent to 128.1 million euros from 215 million euros a year ago, the bank said. Lending to clients climbed 5.1 percent from a year ago to 41.7 billion euros as customer deposits rose 5.7 percent to 22.9 billion euros.

Bad loans as a proportion of total lending rose to 2.77 percent from 2.69 percent in June and 2.22 percent a year ago, the bank said.

Yesterday, Bankinter reported that Maria Dolores Dancausa, previously head of its Linea Directa insurance unit, would take over from Echegoyen as CEO. Alfonso Botin is the son of Jaime Botin, the brother of Emilio Botin, Chairman of Banco Santander SA.

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