MADRID (Reuters) – Spain’s Sabadell will set aside tens of millions of euros in provisions to cope with the impact from last month’s deadly floods in eastern Spain, its chief financial officer Sergio Palavecino said on Friday.
On Wednesday, the Bank of Spain said catastrophic floods in eastern Spain were likely to have a negative impact of 0.2 percentage points on economic activity in the fourth quarter.
“The impact not is going to be zero but not material (…) some tens of millions of provisions but something that can be manageable,” Palavecino told a financial event in London, adding the lender would give a clearer picture in full-year results.
Spanish banks have an overall loan exposure of over 20 billion euros to the most affected areas by the floods but the Bank of Spain Governor Jose Luis Escriva on Wednesday said the banking sector would be able to absorb the shock.
Caixabank’s Chief Executive Officer Gonzalo Gortazar on Tuesday also reckoned there would a rise in bad loans as consequences of the floods in the area.
(Reporting by Jesús Aguado; editing by Andrei Khalip and David Evans)
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