Bloomberg News

Popular Says It Can Meet Provisions Needs Without State Aid

June 06, 2012

Banco Popular Espanol SA (POP), a Spanish lender whose share price has been cut in half this year, said it would report a profit this year and next as it uses asset sales to cover provisions for souring assets.

Popular will target earnings of 325 million euros ($408 million) this year, 580 million euros in 2013 and “significantly greater” profit in 2014, the Madrid-based lender said in a business plan filed with regulators today.

Spanish banks including Popular are under orders from the government to recognize more losses on real estate loans as the state takeover of the Bankia (BKIA) group announced last month heightens scrutiny of their balance sheets. Popular expects to earn 2 billion euros by the end of next year in gains from a joint venture for its consumer credit and cards business and the sale of its Portuguese life insurance business, bank branches and property, the bank said.

“Popular rules out any type of public capital injection,” the bank said.

Separate government decrees in February and May requiring banks make provisions for real estate oblige Popular to take 7.3 billion euros of charges by the end of 2013.

To contact the reporter on this story: Charles Penty in Madrid at cpenty@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net


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