MADRID (Reuters) – Spain’s state-owned lender Bankia on Monday posted a 10.8 percent drop in first-quarter net profit from a year earlier due to lower trading income and ongoing pressure on lending income.
Net profit for the quarter came in at 205 million euros (£176.8 million), slightly above an average in a Reuters poll of 196 million euros.
As other European banks, Spanish lenders are struggling to lift earnings from loans as interest rates hold at ultra-low levels.
Net interest income – a measure of earnings on loans minus deposit costs – was 502 million euros, down 4.7 percent from a year-ago period and 1 percent lower against the previous quarter, also hit by fierce competition for lending at home.
Analysts expected NII to come in at 501 million euros.
After the European Central Bank reversed course last month, delaying a planned interest rate hike until 2020, analysts have been questioning whether Bankia would be able to meet the profit target of 1.3 billion euros in 2020 though the lender recently maintained its forecast.
(Reporting By Jesús Aguado; Editing by Paul Day and Sherry Jacob-Phillips)