By Judy MacInnes
MADRID, Jan 22 (Reuters) - Bad loan rates at Spain's Bankinter rose less than expected in 2009 in a market where the property sector has plummeted, but pressure on margins and flat volumes hit top-line growth in the fourth quarter.
Net interest revenue fell to 177 million euros ($251.4 million) in the fourth quarter from 215 million in the third, mainly due to the less positive impact of repricing of the retail bank's balance sheet because of lower interest rates.
When rates rise, banks have to pay more to savers immediately or face losing deposits, whereas rates for their loans only adjust gradually as debtors' contracts expire.
Bankinter Chief Financial Officer Gloria Ortiz told analysts during a conference call on Friday that she expects the positive impact of repricing of the bank's mortgage assets to be 'very slight' in 2010.
The bank's residential mortgages as a proportion of total lending is the highest of listed Spanish banks at 70 percent.
However, the fact that Bankinter's loan book is less exposed to the real estate developers and has focused its lending on high earners paid off as bad loans reached 2.46 percent at end-December, below forecasts for around 2.5 percent.
Bankinter also took a prudent line in provisions in 2009, setting aside a total of 879 million euros, of which 134 million were extraordinary provisions mainly for falling property values.
CORE CAPITAL CONCERN
Bankinter's core capital stood at 6.53 percent at end-December, down from 6.60 percent at end-September, and far off the sector average of around 8 percent, sparking concern amongst analysts.
'While the lower capital base at Bankinter can be justified by its lower risk profile than its peers, we think that in the short term amid tighter regulation this could put pressure on the share price,' Banesto Bolsa analysts said.
At 1011 GMT, Bankinter shares were down 0.5 percent at 6.77 euros, but outperformed a 1.77 percent fall on the DJ Stoxx European Bank index where big banks slid on fears that they will be hit by the U.S. bank overhaul threat.
Bankinter's net profit rose 0.8 percent to 254.4 million euros in the full-year, in line with forecasts for 251.9 million, while net interest revenue rose 17.7 percent to 792.6 million euros, below forecasts for 804.4 million.
'Overall uninspiring numbers from Bankinter. Capital ratios and the trend in net interest income are key items to monitor going forward,' Espirito Santo analysts said in a note to clients.
(Reporting by Judy MacInnes; editing by Rupert Winchester) ($1=.7040 Euro) Keywords: BANKINTER RESULTS/ (judith.macinnes@thomsonreuters.com; 34 91 585 8340; Reuters Messaging: judith.macinnes.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
MADRID, Jan 22 (Reuters) - Bad loan rates at Spain's Bankinter rose less than expected in 2009 in a market where the property sector has plummeted, but pressure on margins and flat volumes hit top-line growth in the fourth quarter.
Net interest revenue fell to 177 million euros ($251.4 million) in the fourth quarter from 215 million in the third, mainly due to the less positive impact of repricing of the retail bank's balance sheet because of lower interest rates.
When rates rise, banks have to pay more to savers immediately or face losing deposits, whereas rates for their loans only adjust gradually as debtors' contracts expire.
Bankinter Chief Financial Officer Gloria Ortiz told analysts during a conference call on Friday that she expects the positive impact of repricing of the bank's mortgage assets to be 'very slight' in 2010.
The bank's residential mortgages as a proportion of total lending is the highest of listed Spanish banks at 70 percent.
However, the fact that Bankinter's loan book is less exposed to the real estate developers and has focused its lending on high earners paid off as bad loans reached 2.46 percent at end-December, below forecasts for around 2.5 percent.
Bankinter also took a prudent line in provisions in 2009, setting aside a total of 879 million euros, of which 134 million were extraordinary provisions mainly for falling property values.
CORE CAPITAL CONCERN
Bankinter's core capital stood at 6.53 percent at end-December, down from 6.60 percent at end-September, and far off the sector average of around 8 percent, sparking concern amongst analysts.
'While the lower capital base at Bankinter can be justified by its lower risk profile than its peers, we think that in the short term amid tighter regulation this could put pressure on the share price,' Banesto Bolsa analysts said.
At 1011 GMT, Bankinter shares were down 0.5 percent at 6.77 euros, but outperformed a 1.77 percent fall on the DJ Stoxx European Bank index where big banks slid on fears that they will be hit by the U.S. bank overhaul threat.
Bankinter's net profit rose 0.8 percent to 254.4 million euros in the full-year, in line with forecasts for 251.9 million, while net interest revenue rose 17.7 percent to 792.6 million euros, below forecasts for 804.4 million.
'Overall uninspiring numbers from Bankinter. Capital ratios and the trend in net interest income are key items to monitor going forward,' Espirito Santo analysts said in a note to clients.
(Reporting by Judy MacInnes; editing by Rupert Winchester) ($1=.7040 Euro) Keywords: BANKINTER RESULTS/ (judith.macinnes@thomsonreuters.com; 34 91 585 8340; Reuters Messaging: judith.macinnes.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
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