January 31, 2014 / 12:05 AM / 4 years ago

BBVA, Spanish peers to show 2013 earnings recovery

* BBVA, Caixabank and Popular to report 2013 results

* BBVA seen posting Q4 loss after Chinese stake sale

* But 2013 profit to leap as property charges fall

* Caixabank, Popular profit also seen rising

MADRID, Jan 31 (Reuters) - Spain’s second-biggest bank BBVA and two smaller peers are expected to post jumps in 2013 profit on Friday, largely thanks to lower provisions on soured property loans.

Investors will be looking for signs that their core lending businesses are on the mend, however, and BBVA, Caixabank and Banco Popular should show improved earnings from loans in the fourth quarter.

Spain’s economy grew for a second straight quarter in the final three months of 2013, data on Thursday showed, and that recovery should start feeding through to the country’s banks even though unemployment remains high.

A drop in deposit rates throughout 2013 is also beginning to help banks’ net interest income, which tracks earnings from loans minus funding costs, though the turnaround will likely only be notable in the fourth quarter of the year.

BBVA, which makes the bulk of its profit abroad, will like its peers benefit from lower charges in 2013 against rotten real estate loans and foreclosed property.

Spain forced its banks to make hefty provisions on these assets in 2012, gutting earnings and pushing the weakest into state bail-outs.

But BBVA also took a hit in the fourth quarter from the sale of a 5 percent stake in China’s CITIC Bank Corp at a loss, although the deal bolstered its core capital ratio under stricter new international rules.

BBVA is forecast to make a loss of 1.05 billion euros in the fourth quarter of 2013, according to the averaged estimates of analysts polled by Reuters.

For the whole of 2013, its net profit is seen growing 22.5 percent to 2.05 billion euros.

BBVA’s business in Mexico, its biggest market, will also be in the spotlight after Spanish rival Santander said on Thursday its annual Mexican profit was down nearly 30 percent.

Popular, the country’s fifth biggest bank by market value, should show a notable recovery from 2012 losses of 2.46 billion euros. Its 2013 net profit is forecast to come in at 261 million euros, according to analysts polled.

Barcelona-based Caixabank, the country’s third biggest lender, is forecast to more than double 2013 net profit to 543 million euros, according to the Reuters poll. (Reporting by Sarah White, editing by David Evans)

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