Spanish banks book provisions against property sector

Spanish banks said they would book more weighty provisions against risky property loans as part of a government plan to clean up the financial sector once and for all.
Santander, the biggest eurozone bank by market capitalisation, planned to book an extra 2.3 billion euros ($3.0 billion) in provisions to respect the “new standards of real-estate assets,” it said in a statement on Tuesday.
The move, which comes in addition to 3.18 billion euros in provisions booked in late 2011, was taken to ensure compliance with a Spanish government plan presented on Friday, a statement said.
That reform requires Spanish banks to scrape together a total of 50 billion euros in provisions and capital reserves to offset possible losses on loans to the feeble real-estate sector.
Santander’s share of the total is 6.1 billion euros, the bank said.
The second-biggest Spanish bank, BBVA, put the net impact on its bottom line at 1.36 billion euros in a statement to the Spanish financial market regulator CNMV.
Number three Caixa said it would book an additional 2.436 billion euros in provisions to conform with the government’s plan.
The Spanish banking sector as a whole is estimated to be carrying risky real-estate loans worth 176 billion euros.
Santander also said it would set aside 2.3 billion euros from capital gains and operating profit in 2012 to feed the fund, of which 900 million would be provided by the sale of Banco Santander Colombia.http://tourism9.com/    http://vkins.com/