Provisions and deferred taxes to boost the second quarter of Dexia
The Franco-Belgian bank Dexia publishes a net profit decline of 12.4% in the second quarter of 2010 at 248 million euros but is superior to the expectations of analysts thanks to lower provisions and a deferred tax.
The group said in a statement that its provision for credit losses were reduced by more than two in the period and quarterly accounts have received a tax credit of 30 million euros, offsetting a decline of 16 , 5% of its revenues.
The consensus reached by Inquiry Financial expected a general decline in net profit by 28% to 205 million euros for the second quarter.
With a decline in earnings, the results of Dexia contrast with those of other European banks, which have generally reported sharply higher profits even if investors are skeptical about the quality of bank accounts.
Last February, Pierre Mariani, managing director of the group, warned that 2010 would be a more difficult exercise for Dexia as 2009.
The bank had at that time that it would focus on controlling costs to maintain profit margins.
Forced to restructure after being rescued from bankruptcy in fall 2008 by the Belgian State, French and Luxembourg, the bank has been out since late June of the machinery of government guarantees for its financing needs.
In return for the aid received during the financial crisis, it also agreed to divest subsidiaries in Italy, Spain and Slovakia as well as its insurance activities in Turkey.
This weight loss program should enable it to fulfill its commitment to reduce by 35% the size of its balance sheet by 2014.
The Dexia share closed Thursday at 3.965 euros (+0.2%). Year over year, it is down 26.54% and shows a decline of 7% since January 1, underperforming the Stoxx 600 index of European banks (3.25%).