Struggling Spanish lender Bankia has been reported to have logged a profit in the first nine months of the year. The recovery came after a massive bailout last year, with huge problems prevailing in the lending sector.
Bankia announced Monday it had switched into small net earnings in the third quarter after huge losses in the previous year.
In the first nine months of 2013, the Spanish lender posted a net profit of about 360 million euros ($497 million), with the third quarter contributing 161 million euros, up from 2.6 billion euros in losses in the same quarter a year earlier.
In December 2012, eurozone governments granted some 40 billion euros in bailout funds for ailing Spanish banks, with Bankia getting 18 billion euros.
The collapse of Spain's property sector in 2008 had left lenders burdened with toxic real estate assets, accelerating the nation's economic crisis.
Bankia's recovery had not come solely because of the lender's cost-saving and restructuring efforts.
Bank deposits had risen and their solvency had improved owing in no small way to the transfer of sour real estate assets to Sareb, a bad bank set up specially to absorb lenders' non-performing loans.
In addition, Bankia booked extraordinary profits in the third quarter owing mainly to the sale of 12 percent of its stake in insurance company Mapfre for 979 million euros.
That one-off effect helped to compensate for a continuously weak lending business caused by historically low interest rates.
Last month, the European Commission published its fourth review of the bank bailout program, saying the Spanish economy was showing signs of a "mild recovery."
It said Spain's borrowing costs had gone down and its financial markets had stabilized.
hg/ipj (AFP, Reuters, dpa)