European banks' profits hurt by euro crisis
Source: Agencies |
April 27, 2012, Friday
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Print Edition
Print Edition
QUARTERLY reports from some of Europe's top banks showed the scars of the eurozone crisis yesterday, with big losses on Spanish property, and fragile markets casting a shadow over the rest of the year despite an early investment banking rebound.
Spanish bank Santander said first quarter net profit dropped 24 percent after it took a 3.1 billion-euro (US$4.1 billion) provision to cover rising loan defaults, as the effects of Spain's property market crash were compounded by economic recession and joblessness afflicting nearly one in four workers.
Although results from Barclays and Deutsche Bank showed investment banking income bounced back strongly after a torrid end to last year, the sickly eurozone economy continues to dog the industry.
Barclays beat analysts' forecasts with a 22 percent rise in underlying first-quarter profit to 2.45 billion pounds (US$3.97 billion), as revenues at Barclays Capital, the investment bank that provides the bulk of its profit, rose to 3.5 billion pounds, up 91 percent on a weak fourth quarter and up 3 percent from a year ago.
Losses on bad debts shed 16 percent from a year ago, but the bank warned the backdrop remained difficult.
"The environment remains challenging and volatile," Barclays CEO Bob Diamond said. "It's still slow economic growth around the world. It's still a zero interest rate policy in developed economies. This is not a robust environment."
Revenues from Deutsche Bank's corporate banking and securities division hit 6.2 billion euros, up over 80 percent from the fourth quarter, but down 8 percent from a year ago.
Its group pretax profit fell to 1.9 billion euros, down from 3 billion euros a year ago and missing analysts' forecasts.
Spanish bank Santander said first quarter net profit dropped 24 percent after it took a 3.1 billion-euro (US$4.1 billion) provision to cover rising loan defaults, as the effects of Spain's property market crash were compounded by economic recession and joblessness afflicting nearly one in four workers.
Although results from Barclays and Deutsche Bank showed investment banking income bounced back strongly after a torrid end to last year, the sickly eurozone economy continues to dog the industry.
Barclays beat analysts' forecasts with a 22 percent rise in underlying first-quarter profit to 2.45 billion pounds (US$3.97 billion), as revenues at Barclays Capital, the investment bank that provides the bulk of its profit, rose to 3.5 billion pounds, up 91 percent on a weak fourth quarter and up 3 percent from a year ago.
Losses on bad debts shed 16 percent from a year ago, but the bank warned the backdrop remained difficult.
"The environment remains challenging and volatile," Barclays CEO Bob Diamond said. "It's still slow economic growth around the world. It's still a zero interest rate policy in developed economies. This is not a robust environment."
Revenues from Deutsche Bank's corporate banking and securities division hit 6.2 billion euros, up over 80 percent from the fourth quarter, but down 8 percent from a year ago.
Its group pretax profit fell to 1.9 billion euros, down from 3 billion euros a year ago and missing analysts' forecasts.
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