MADRID/BARCELONA, Spain (Reuters) - Spanish banks face taking flight bad loans in a low retrogression that shows no pointer of easing after getting by the worst of a low washed of decaying skill properties that gutted increase final year.
BBVA
The banks wrote billions of euros off the worth of loans to actual estate developers and foreclosed home and buildings, after Spain enforced a cleanup of their books final year subsequent to a skill collision 5 years ago.
Their loans in overdue moreover rose as businesses and homeowners struggled to pay back debt in a nation where a in 4 workers is out of a job, indicating more suffering to come.
The actual estate cleanup is forthcoming to an finish and bank's gain should upgrade as supplies tail off this year. But bad loans, that reached a new high in November of 11.4 percent of banks' excellent portfolios, will still weigh.
"Bad loans will go on to blossom this year, it wouldn't be practical to regard otherwise," mentioned Angel Ron, Chairman of Banco Popular
, that reported a loss of 2.46 billion euros for 2012, somewhat wider than analysts had expected.
BBVA's Chairman Francisco Gonzalez mentioned Spain's manage to buy would expected attain a branch indicate at the finish of 2013.
BBVA that creates half its sum income in South America and Mexico, mislaid over 1 billion euros ($1.4 billion) in its Spanish business final year. It put in reserve 9.5 billion euros opposite the group, about half that was writedowns on Spanish skill assets.
Lenders are anticipating they are past the worst, as the Spanish government's appropriation problems ease and the euro-zone debt predicament abates.
Spain's weakest banks have taken around 40 billion euros ($53 billion) of European rescue supports to reconstruct their capital.
"2012 was may the worst year of the crisis, there's no skepticism it will go down in story books," Isidro Faine, Chairman of Caixabank told a headlines discussion in Barcelona.
He updated that the bank still had 900 million euros of skill supplies to take in the initial half of 2013, after writedowns final year pushed distinction down 78 percent. Its loans in overdue rose to 8.62 percent of its complete loan book after it paid for state-rescued Banco de Valencia.
MEXICO SHINES
BBVA fared improved than its not as big peers upheld by a sound opening in Mexico, where it runs the country's greatest bank and that provides 25 percent of BBVA's sum income, roughly as ample as Spain.
"Strong increase in Latin America cancel out serve supplies in Spain," Jaime Becerril, an researcher at JPMorgan, mentioned in a note to clients.
Other analysts moreover pointed to fourth-quarter expansion in BBVA's net fascination income, broadly the disparity between what a bank earns on loans and pays out on deposits, as an enlivening pointer for gain next year.
BBVA's annual distinction fell 44 percent to 1.67 billion euros, in line with researcher forecasts.
BBVA's incomparable opponent Santander is moreover safeguarded to a few grade from problems in Spain by considerable abroad businesses, nonetheless it is more unprotected to Brazil, where the manage to buy is negligence and bad loans are rising.
Santander and BBVA are seeking at chances to spread in Spain, however, and are both deliberation a purchase of bailed-out Catalunya Banc.
"If you regard you can emanate value, you will make an competent offer," BBVA's Gonzalez said.
LIQUIDITY LET-UP
BBVA has relied on abroad disposals to help erect up capital, and it voiced other contract on Friday, with the sale of its stake in its Chilean allowance business to Metlife. The treat will net it a 500 million euros capital gain.
In a pointer that appropriation pressures are easing, Spain's lenders have started to lapse predicament loans taken from the European Central Bank.
BBVA mentioned on Friday it had repaid 8 billion euros of the supposed longer-term refinancing operations, or LTROs, set up by the ECB in December 2011 and February 2012.
It moreover suggested its complete LTRO borrowings had reached around 30 billion euros after it paid for discovered extra savings bank Unnim, and BBVA it would be left with about half that amount after repaying other 7 or 8 billion euros in February.
Caixabank moreover repaid 4.5 billion euros in LTRO funds. ($1 = 0.7367 euros)
by Clare Kane, Sonya Dowsett and Tomas Cobos; Editing by Erica Billingham)