MADRID (Reuters) – Spain’s BBVA <BBVA.MC> will book an impairment charge of $1.5 billion in the United States in the fourth quarter following a decline in interest rates and an economic slowdown in the country, the bank said on Thursday.
It added that the negative adjustment to the value of the goodwill in its U.S. unit would result in lower than expected future profits compared to previous estimates.
The U.S. accounts for around 10% of the bank’s earnings. Net profit in the country in the first nine months fell 17% from the same period a year ago.
BBVA said the accounting adjustment would not result in cash outflows and therefore would not impact the group’s liquidity, tangible net equity nor its capital.
It also said it would not alter its ability to distribute dividends nor change the amount of the dividend payment which will be proposed to the board of Directors for its approval.
The U.S. Federal Reserve has cut its main interest rate three times this year, although it held fire at last week’s policy meeting.
BBVA also said on Thursday it had appointed Peio Belausteguigoitia as head of BBVA Spain, replacing Cristina de Parias.
(Reporting By Jesús Aguado; editing by Andrei Khalip, Kirsten Donovan)