Spain’s Banks Used by UK Expats in Costa del Sol and Costa Blanca see Big Coronavirus Downturn

TWO major banks in Spain used by UK expats in the Costa del Sol and Costa Blanca areas have reported a big downturn due to the coronavirus crisis.

BBVA have turned in a quarterly loss of €1.79 billion, whilst Caixabank has seen quarterly profits for the first three months of 2020 slashed by 80 per cent.

Earlier this week, Santander reported an 82 per cent profit plunge.

BBVA said their poor figures were caused by their investments in their US operation suffering because of the Covid-19 pandemic restrictions.

Removing that from the financial equation, BBVA’s profits fell by 75.3 per cent between January and March of this year.

The company announced that shareholders would not be paid a dividend this year unless the uncertainties of the current crisis disappear.

BBVA was the only major Spanish bank that had made any changes to its policy on dividend payments, after the European Central Bank had told lenders to skip dividend payments and share buy backs until October at the earliest to use any profits to support the economy.

Caixabank’s profit drop is in line with the BBVA figures, but the country’s third largest bank in terms of assets, still logged a net profit of €90 million in the January-March quarter, which was down from €533 million in the same period last year.

Spain’s government announced plans to gradually phase out the lockdown restrictions during May, but the economic paralysis is expected to take the country into a severe recession.

Caixabank’s bottom line was also hit by one-off charges worth €109 million related to an early retirement plan that they had to fund.

The bank was also affected by low interest rates.