MADRID (Reuters) – Spanish banks’ earnings for the first half of the year, which start on Thursday with Bankinter, are likely to be marked by a continued cleanup of toxic real estate assets which will hit profits.
Although Bankinter is not fully representative of the sector, as it is less exposed to the property market than the rest of Spanish lenders, the medium-sized bank will report a halving in net profit on Thursday, a Reuters poll forecasts.
Euro zone finance ministers will discuss on Friday the conditions attached to the release of up to 100 billion euros ($122 billion) in aid for Spain’s banks, loaded with bad loans following a 2008 property crash and ensuing recession.
The government has demanded banks write down losses of more than 80 billion euros on around 184 billion of repossessed property and bad loans to developers, as well as sound real estate assets, through two laws passed before the country sought European aid for its lenders.
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