Spain's top banks announce provisions for property losses

The three largest banks in Spain by market value have unveiled the steps they will take over the course of 2012 to comply with new government regulations relating to the provisions they need to make to cover real estate losses.

Banco Santander, which announced last week it had set aside an additional €1.8 billion (£1.5 billion) to meet losses on repossessed homes in Spain, is due to add a further €2.3 billion to this pot.

Banco Bilbao Vizcaya Argentaria (BBVA) intends to make provisions of around €1.4 billion, in addition to money it had already earmarked for this purpose ahead of the Spanish government's announcement.

BBVA added its strong performance in 2011 means it will be able to "entirely absorb" the sum in 2012.

Finally, Caixabank has stated it will find an extra €2.4 billion to cover its Spanish real estate assets.

Speaking to Reuters, financial director at BBVA Manuel Gonzalez Cid commented: "These are the strongest banks in the Spanish financial sector so it's not surprising they can manage the [requirements] through generic provisions or by bringing forward other capital buffers."

Moody's recently announced it had downgraded Catalunya Banc and Bankia's debt and deposit ratings over concerns that the financial institutions will be unable to meet the higher provisions for real estate losses laid out by the government.

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