BBVA profits fall on slump in Spain

Profits at Spain's BBVA fell 14.3 per cent to €3.14bn in the first nine months of the year compared with the same period last year, the bank announced on Wednesday.

Net interest income was down 5 per cent to €9.68bn.

Along with most Spanish banks, BBVA has been hard hit by the combination of a collapsing property market and the eurozone financial and economic crisis, but it has remained one of the more profitable European banks since the collapse of Lehman Brothers in 2008.

BBVA said its core tier one capital ratio, a closely watched measure of financial strength, had risen to 9.1 per cent of risk-weighted assets at the end of September, up from 9.0 per cent in June and 8.2 per cent a year earlier.

In the latest quarter, the three months to September, BBVA's net profit fell more than expected by analysts to €804m, from €1.19bn in the second quarter and €1.14bn in the third quarter of 2010. Iñigo Vega, analyst at CA Cheuvreux, said a loss on trading instead of the usual profits was to blame.

BBVA said it was gaining market share in the difficult Spanish market, in both deposits and lending.

Shares in BBVA fell 0.8 per cent to €6.26 in early Madrid trading.