Spain's Caixabank net profit plunges over 80% on higher provisions

MADRID (Reuters) - Spain's Caixabank <CABK.MC> said on Thursday its first-quarter net profit shrunk more than 80% after the lender booked provisions worth 400 million euros (347.9 million pounds) to deal with the economic impact of the coronavirus outbreak.

Caixabank, the country's third-largest bank in terms of total assets, reported a net profit of 90 million euros in the January-March quarter, down from 533 million euros last year.

Spain, one of the worst-hit countries by the pandemic with more than 24,000 fatalities recorded so far, has been under one of the strictest lockdown since mid-March.

The country's government is now planning to gradually phase out the restrictions starting next week, but the economic paralysis is expected to take the country into a severe recession.

Caixabank's bottom line was also hit by one-off charges worth 109 million euros related to an early retirement plan in the quarter.

Besides the provision and the impairments, Caixbank profit was also hit by rock-bottom interest rates in the region. Its net interest income, a measure of earnings on loans minus deposit costs, fell 3% in the period to 1.2 billion euros.

The bank's cost of risk, which measures the price of insuring its loan book, climbed to 31 basis points from 15 basis points a year earlier.

Caixabank's core equity tier-one ratio, an indicator of the a bank's solvency, remained at 12%.

(Reporting By Jesús Aguado, Editing by Inti Landauro and Sherry Jacob-Phillips)