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Spain’s Caixabank Q3 recurrent profit pro-forma up 33% y/y, NII pressured

Spain’s Caixabank (CABK.MC) on Friday said its third-quarter recurrent profit rose 33% measured against the same period a year ago, due to lower loan loss provisions which offset pressure on lending income.

Caixabank, which closed the Bankia 4.3 billion acquisition in March, a defensive deal to better cope with ultra low interest rates and the coronavirus pandemic, posted an underlying profit of 744 million euros ($868.5 million) in the July to September period without extraordinary items from the merger. .

However, a pro-forma profit of around 560 million euros for the third quarter of 2020 was used to calculate the year-on-year comparison taking into account Bankia.

European banks are struggling to cope with low interest rates, and the economic downturn sparked by the pandemic is forcing a focus on cost cuts, including through tie-ups.

Net interest income, a measure of earnings on loans minus deposit costs, fell on a pro-forma level 7.3% against the same quarter in 2020 to 1.59 billion euros, slightly below the 1.61 billion euros expected by analysts.

Reporting by Jesús Aguado, editing by Inti Landauro

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