Spanish banks to set aside €4.5bn

Banco Santander SA and Banco Bilbao Vizcaya Argentaria will set aside €4.5bn to meet a Spanish government order to boost real estate provisions as analysts speculate the industry may need more.

Santander, Spain’s biggest bank, said it will make €2.7bn of pre-tax provisions while its largest rival BBVA will take pre-tax charges of €1.8bn, the lender said. Bankia, taken over by the government last week, said it would need an extra €4.7bn before tax. Bank shares fell.

Spanish banks have used three-year emergency loans from the ECB to cover funding needs and buy the nation’s bonds as doubts about hidden losses on their balance sheets drove up their financing costs and kept them locked out of wholesale debt markets.