Margin call

29 April 2015 By Fiona Maharg-Bravo

Better GDP prospects, cheaper funding and lower provisions for bad loans are helping Spain’s lenders. Banks have reported sharp increases in profits in the first quarter of 2015. But pressure on net interest margins will create headwinds later this year.

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BBVA on April 29 reported first-quarter net income of 1.5 billion euros, more than double the figure in the first quarter of last year, as a one-off gain and growth in Mexico offset a hit from currency devaluation in Venezuela. Excluding the gain from the sale of a stake in China’s CNCB bank, profit was still up 53 percent to 953 million euros.

On April 28, Santander told analysts on a conference call that Spanish net interest income could suffer in the coming quarters. The Spanish bank reported a 32 percent jump in first-quarter profit to 1.7 billion euros.

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