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5 Spanish banks disclose impact of mortgage floor ruling on FY'16 results

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5 Spanish banks disclose impact of mortgage floor ruling on FY'16 results

Banco Mare Nostrum SA and Kutxabank SA could collectively take a €140 million hit to their full-year 2016 earnings as a result of the European Court of Justice's ruling relating to reimbursing borrowers who were overcharged on their mortgages involving interest rate floors.

Specifically, BMN said it will seek board approval for €80 million in provisions to cover the potential impact on its 2016 results, while Kutxabank will book a net charge of €60 million due to related provisions recorded by CajaSur Banco SAU.

ABANCA Corporación Bancaria SA estimated the potential impact at €30 million but noted that the figure was preliminary and protected under an existing guarantee relating to a sales contract with Spanish bank restructuring fund FROB.

Additionally, Caja Rural de Granada SCC will book a maximum charge of €45 million, and Caja Rural de Navarra SCC increased its 2016 provisions by €11 million, following the court ruling.

CaixaBank SA, Banco Popular Español SA and Ibercaja Banco SA have already increased provisions for the matter.