The Spanish Bankia registers a 54% drop in profit due to coronavirus in the first quarter

The fourth Spanish bank, Bankia, announced this Wednesday a 54% drop in its net profit in the first quarter due to the provision of 125 million euros to face the impact of the coronavirus pandemic.

Without this extraordinary reserve, net profit would have increased by 11.3% compared to the first quarter of 2019, the bank said in a statement.

The result of 94 million euros (about 102 million dollars) is lower than expected by analysts consulted by financial information provider Factset, who forecast an average of 118 million euros of profit.

“With this decision to advance provisions, we will be prepared to respond quickly and efficiently to the financial needs of families and companies in a situation as complex as the current one,” the entity’s president, José Ignacio Goirigolzarri, said in this statement.

The bank, 61.8% owned by the State after the public rescue carried out in 2012, advanced a total of 239 million euros in provisions, ordinary and extraordinary.

After the confinement declared in Spain on March 14, Bankia promoted its “digital channels” to serve customers but kept “90% of the network of branches open to continue providing the service as normally as possible,” the statement said.

The entity, with 16,000 employees, specifies that 55% of its clients use digital channels for their operations.

Bankia says it is currently processing applications for loans and credits worth 7,320 million euros from companies affected by the pandemic that have accessed public guarantees made available by the government.

In 2019, Bankia announced a contraction of 23% of its net profit after having set aside provisions related to toxic real estate assets.

In 2012, after the serious financial and real estate crisis in Spain, the bank was saved thanks to the nationalization and injection of 22,000 million public euros, more than half of the European fund of 41,300 million agreed to this country to save its system banking.

The bank now celebrates having reduced its delinquency rate, the percentage of loans at risk of not being repaid, to 4.9%.