Banco Popular's Net Profit Down 9% As Bad Loans Rise

Banco Popular Espanol SA (POP.MC) said Wednesday its first-quarter net profit fell 9%, as the bank's financing costs and bad loans rose in Spain's lengthy economic downturn.

MAIN FACTS:

-Net profit for the three months stood at EUR185.7 million, compared with EUR204 million a year earlier.

-Analysts were expecting net profit of EUR154 million, according to a Dow Jones Newswires survey of 9 brokerages.

-First-quarter net interest income fell 22% to EUR515.5 million from EUR663.4 million.

-Popular's earnings included a EUR497 million capital gain from the sale of a majority of the bank's asset manager to Germany's Allianz SE (ALV.XE). The proceeds of the sale were used to cover souring loans and writedowns.

-Total provisions rose to EUR835.6 million from EUR395.9 million a year earlier.

-The non-performing loan ratio grew to 5.44% of total loans at the end of March, up from 5.27% in December.

-Popular's core Tier 1 capital ratio rose to 9.93%, from 8.74% a year earlier.

-By Christopher Bjork; Dow Jones Newswires; [phone]; [e-mail]