Bankia's profit fell 23 percent in 2016 due to low interest rates and additional charges related to mis-sold mortgages that hit its profitability ratio. Ciara Lee reports
A profit fall of 23 percent in 2016. Low interest rates and additional charges relating to mis-sold mortgages meant Spain's Bankia missed analysts forecasts . Full-year net profit for the state-controlled lender came in at 804 million euros. Earnings in the last three months of the year were down over 70 percent from the previous quarter. That was thanks to having to set aside 65 million euros to meet compensation claims related to the mortgage mis-selling. Spanish banks' results have been hit by a ruling in December from Europe's top court that they must repay mortgage customers more than 4 billion euros. (SOUNDBITE) (English) JASPER LAWLER, SENIOR MARKET ANALYST AT LCG , SAYING: "I think this is probably just a sign of things to come for Spanish banks in general. The mortgage situation, the ruling in December which overturned the cap on how much these banks were going to have to pay out is going to be a major headwind. And I think the likes of Bankia, for the next few quarters, are going to have to put more and more provisions in to addressing this problem with Spanish mortgage holders and that is going to limit earnings." Bankia has opened a fast-track method to repay clients who were sold the invalid mortgage agreements. The government owns 66 percent of the lender, and has so far has recovered 1.8 billion euros from the 22 billion euros it injected in 2012. Shares in Bankia though are up 10 percent over the past year and were up 1 percent after the results were announced.