March 21, 2019 / 3:49 PM / in a month

Spain's Bankia sticks to 1.3 billion euro profit target for 2020

FILE PHOTO: Spain's Bankia logo is seen inside bank's headquarters before a news conference to present their annual results in Madrid, Spain, January 30, 2017. REUTERS/Sergio Perez

VALENCIA, Spain (Reuters) - State-owned Spanish lender Bankia will meet its net profit target of 1.3 billion euros ($1.48 billion) in 2020 despite low interest rates, its chairman said on Thursday.

Analysts have been questioning whether Bankia would be able to meet the 2020 target after the European Central Bank delayed any prospects of higher interest rates next year.

“We will stick to our net profit target and to our plan to pay back 2.5 billion euros to our shareholders,” Jose Ignacio Goirigolzarri told journalists in Valencia, a day before the bank’s annual shareholder meeting. [L8N1QH1MB]

Goirigolzarri also said it was not the right time for the state to sell further stakes in the lender after the recent decline in its share price.

Bankia shares have fallen by almost 6 percent since the start of the year.

Spain has been trying gradually to sell its 61.4 percent stake after pumping 22.4 billion euros ($25.7 billion) into a rescue package for Bankia in 2012 at the height of the financial crisis. The state has until 2021 to offload the stake under a self-imposed deadline.

Analysts have said that Spanish banks may consider consolidation as low interest rates in Europe pressure margins.

Though Goirigolzarri said Bankia was not contemplating any mergers, he added that it would be a good fit for any potential bidder.

Reporting By Jesús Aguado; Editing by Axel Bugge and David Goodman

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