Banesto’s Q3 figures released

Banesto, part of the Santander group, has accounced results for Q3 today revealing a huge drop in profits due to what the bank is calling a “diffilcult year for the banking business”.

Banesto’s net profit fell in the third-quarter to €298.4m compared to €450.6m for the same period last year, a drop of 33.8%. Analysts predicted a 23.4% average fall in net income over the first nine months of the year.

Banesto added that this was a result of the continuing ecenomic crisis hitting banks across Europe, along with the ever rising cost of financing. Banesto is the first Spanish bank to release it’s figures each quarter.

Like other Spanish banks Banesto’s “bad loans” have affected their bottom line. Across the industry the bad-loan-ratio was 6.69% in July. Although it is still below the average Banesto’s ratio rose to 4.65% at the end of September, a slight increase from 4.39% in June.

The bank reduced private sector credit by 8% compared to the first nine months of 2010. This was due to the banks attempt to reduce the dependance on outside funding. Other banks in Spain have also been attempting to reduce private sector credit.

Banesto’s net interest income fell to €1.13bn, a drop of 12%, during the first three quarters of the year. This increased to 14% (€361,7m) during September.

The banks said their core capital ratio had reached 9 percent in September which would allow the bank to meet its target for the year.

On release of the figures Banesto shares fell 1.3 percent to €4.50 in Madrid, incresing the decline for the year to 28 percent.

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