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Banco Popular net Profit falls by almost half

Fri 28th Oct 2011

Earlier today Banco Popular posted their Q3 results, detailing a 41% drop in net profits, as figures took a beating under pressure of bad loans.

The fifth-largest bank in Spain (in terms of assets) reported how net profits fell to €98.6 million from €166.9 million for the same period last year.

The Bank's lending margins continued to be squeezed during Q3 after being hit by higher funding costs and stagnant loan growth. As a result, net interest income fell to €515 million from €603.7 million compared to 2010.

Banco Popular's asset quality also worsened over Q3, with bad loans increasing to 5.85% of total loans by September, up from 5.17% on the same period in 2010. A total of €6.92 billion of the bank's loans were in excess of 3 months past due by the end of Q3.

The Bank still needs to fill a capital shortfall of €2.36 billion by June of next year, the bank said earlier this week. The bank reiterated that it wouldn't need state aid to fill this gap, saying it had "a number of measures" to boost capital.

Popular is in the process of taking over smaller rival Banco Pastor SA, a deal that will raise its total assets to €160 billion, and give it a 7.3% share of the Spanish market.

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