* Santander, Caixabank, Sabadell posting Q1 results Thursday
* Rising bad debts in Spain and lending outlook in focus
* Q1 profits seen falling at Santander and Sabadell
* Brazil performance and outlook also key for Santander
MADRID, April 25 Three of Spain's healthier
lenders, including top player Santander, are expected
to show the scars from a tough economy when they report
first-quarter earnings on Thursday.
Rising bad loans and faltering lending margins are expected
to feature for Caixabank, Sabadell and even
Santander, for which Spain contributed only 15 percent of
profits last year.
Recession in its home country and low interest rates are
likely to weigh on Santander's net interest income, which
broadly measures lending margins.
The euro zone's largest bank is expected to post a 1.3
billion euro ($1.7 billion) net profit, down 17.2 percent on a
year earlier, according to a Reuters poll of analysts, as income
from key markets such as Brazil also drops.
Spain's third-biggest lender Caixabank and
Sabadell, the fifth, are also expected to report
operating profit knocked by restructuring expenses from
They recently bought some of state-rescued banks whose
exposure to soured property loans and assets forced Spain to
seek a 41 billion euro ($53 billion) bailout for its weak
lenders last year.
Santander, Caixabank and Sabadell managed to survive without
government help, though their 2012 earnings were also gutted by
heavy provisions on rotten real estate deals.
Attention is now turning to troubled loans in other
segments, including small company borrowers.
Spain's biggest state-rescued lender Bankia said
late on Wednesday that its bad debts rose to 13.1 percent at the
end of March, well above February's sector average of 10.39
percent, as it managed to swing back to profit from record
Quarterly net profits at Caixabank and Sabadell could be
boosted by accounting gains derived from acquisitions at
knock-down prices, but Sabadell's profit is expected to drop 82
percent to 14.7 million euros, according to a Reuters poll of
The average of three analysts' predictions for Caixabank
first-quarter net profit was a more than threefold increase to
171 million euros against a year earlier.
At Santander, investors will also be looking out for
revenues projections in Latin America, which contributes about
50 percent of group profits, and for signs of progress with
planned share listings for its UK subsidiary and U.S. consumer
finance business to raise capital.
($1 = 0.7695 euros)
(Reporting by Sarah White; Editing by David Goodman)