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Bankia Q1 profit ticks down YOY, but impairment losses fall 55.7%

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Bankia Q1 profit ticks down YOY, but impairment losses fall 55.7%

reported first-quarterprofit attributable to the group of €237 million, compared to €244 million inthe year-ago period.

Strippingout the year-ago contribution of CityNational Bank of Florida, which was sold in October 2015,attributable profit rose to €237 million from €232 million.

"Thisresult has been obtained in a first quarter in which penalizing factors for thebanking sector such as a drop in the reference interest rates (EURIBOR) and alower profitability from the debt portfolio have continued to accentuate,"Bankia said.

Netinterest income for the period reached €577 million, down from €693 million ayear earlier, or €659 million if excluding City National Bank. Bankia noted that netinterest income was reduced an estimated €39 million by the repricing of bondsissued by Spanish bad bank SAREB in December 2015, and a further €11 million incomparison to the year-ago period by the elimination of floor clauses on homemortgage loans.

Totalnet fees and commissions amounted to €200 million, compared to €233 million inthe first quarter of 2015, while gains on financial assets and liabilities fellto €61 million from €73 million.

Totalrecurrent provisions reached €128 million, down from €219 million in the firstquarter of 2015, as impairment losses on financial assets declined to €87million from €198 million, which Bankia attributed to "active riskmanagement and … the enhanced quality" of its loan book.

Thetotal nonperforming loan ratio stood at 10.5% at March-end, compared to 10.8%at the end of 2015 and 12.6% at March 31, 2015. The NPL coverage ratio was60.5% at March 31, compared to 60.0% at 2015-end and 59.4% at March 31, 2015.

ROEwas 8.2% during the quarter, compared to 8.7% a year earlier.

Thebank's phased-in Basel III common equity Tier 1 ratio was 14.06% at March-end,compared to 13.89% at Dec. 31, 2015. As of March 31, the fully loaded CET1ratio was 12.52%, compared to 12.26% at the end of 2015.

Thebank's phased-in leverage ratio stood at 5.7% at March-end, flat from the endof 2015. The fully loaded leverage ratio was 5.1% at March-end, compared to5.0% at Dec. 31, 2015.