February 1, 2019 / 8:04 AM / 10 months ago

UPDATE 3-Spain's Caixabank lags BBVA in fourth quarter, knocking shares

(Adds details on provisions, shares in Spain’s banks)

By Axel Bugge

MADRID, Feb 1 (Reuters) - Caixabank lagged its larger Spanish rival BBVA in the fourth quarter, reporting higher provisions and a sharp net profit fall which wiped more than seven percent off its shares.

Spain’s third-largest bank said its net profit fell 54 percent in the fourth quarter from the previous three-month period to 217 million euros ($248 million), which Jefferies analysts said was far short of a consensus of 335 million euros.

Caixabank’s shares were down 7.4 percent in afternoon trade, adding to an overall drop in Spanish bank stocks on Friday. Sabadell was the biggest faller, losing 9 percent after its British subsidiary TSB reported plunging earnings due to costs from an IT meltdown.

BBVA, Spain’s second-largest bank, was 1.1 percent lower while Spain’s largest bank, Santander, was down 2.2 percent.

Caixabank’s results were hit by one-off charges, including 53 million euros for early retirements and 60 million euros related to a real estate deal.

There was also a net loss of 139 million euros resulting from an accounting change of the bank’s holding of BFA, a bank in Angola that Caixabank inherited through its purchase of Portugal’s Banco BPI.

“This is an accounting decision,” Chairman Gonzalo Gortazar said on a conference call. “What we have seen is that the initial assumption does not really hold, I think it helps the clarity of our P&L going forward.”

Caixabank’s fourth-quarter net interest income was flat at 1.24 billion euros from the previous three months. For the full year it said its net interest income, earnings on loans minus deposit costs, rose by 3.4 percent to 4.91 billion euros.

For the full year, Caixabank said its net profit had risen by 17.8 percent 1.99 billion euros, some way behind BBVA which reported a 51.3 percent rise in 2018 net profit, boosted by the sale of its Chilean business.

BBVA said its net profit was 5.32 billion euros, helped by a net capital gain of 697 million euros from the Chilean sale, while net profit in Mexico, its biggest market, gained 9 percent, offsetting a decline of 31 percent in Turkey.

While BBVA’s financial performance was better than Caixabank’s, it faces an investigation into alleged spying on government officials and businessmen by a security firm it hired in 2004.

Chairman Carlos Torres said on Friday an internal investigation into the matter has not yet revealed any phone tapping networks but the probe is likely to take months and the matter may end up in court.

$1 = 0.8736 euros Reporting by Axel Bugge; editing by Alexander Smith and Louise Heavens

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