BBVA warns of lost income from Spanish mortgage changes
MADRID (Reuters) - Spanish lender BBVA (BBVA.MC) said on Wednesday it would lose 35 million euros ($47 million) in net profit in June, after a court forced it and other banks to change some mortgage structures which protected them against interest rate drops.
Changing these Spanish mortgage structures could end up costing BBVA and two other banks more in lost income in the coming months.
Spain's Supreme court ruled in early May that mortgage floor rates - which prevent interest paid by homeowners from falling below a certain level as other linked rates such as Euribor fluctuate - were invalid if they had not been presented to clients clearly.
BBVA said the impact of the changes beyond June, when they come into effect, would depend on the movements of Euribor, a reference rate used by many euro zone banks to underpin mortgage rates.
State-owned NCG Banco and savings bank Cajamar Caja Rural were also affected by the ruling.
BBVA makes the majority of its income outside Spain in regions such as Latin America, but it has said it wants to grow its market share in its home country.
Like local peers, a deep recession and a property crash has hampered its earnings in Spain, with income from loans dropping in the first quarter.
($1 = 0.7498 euros)
(Reporting by Sarah White; editing by Keiron Henderson)
- Qatar adamant it will host 2022 World Cup despite doubts
- Argentina's Fernandez to meet billionaire investor Soros in New York
- New Jersey hiker killed by black bear : police
- Islamic State urges attacks on U.S., French citizens, taunts Obama
- Housing data hits Wall Street; S&P has worst day since August 5