Spain's Bankia sees profit down 22.7 percent in 2016

Spain's Bankia -- fourth largest bank in the country -- saw its net profit down 22.7 percent in 2016 from a year earlier to 804 million euros (860 million U.S. dollars), the bank reported on Monday.

Bankia blamed the results partly on "the negative interest rate environment" as well as the sale of its subsidiary, the City National Bank of Florida.

It also cited the 114 million euros (122 million U.S. dollars) in provisions made to face the possible impact of mortgage clauses.

The European Court of Justice ruled last year that Spanish banks must pay back customers affected by mortgage floor clauses, which imposed a minimum interest rate on floating-rate mortgages setting a limit on how far mortgages rate could fall.

Bankia is the second lender, after Banco Sabadell, to report the impact of the decision on its profits.

Bankia has increased dividend by 5 percent, saying that despite the fall in profits, "the Bank's comfortable solvency position allows it to recommend a 5 percent increase in the dividend payment to shareholders, which will total 317 million euros (339 million dollars)."

"This payment will bring the cumulative dividend for the last three years to 820 million euros (877 million dollars)," the bank said, "more than 530 million euros (567 million dollars) of which will have gone to the state, helping to repay the state aid received by the bank."

Bankia was one of the banks bailed out by the government due to the financial crisis and received 22.42 billion euros (23.96 billion dollars) of public aid.

Bankia's chairman, Jose Ignacio Goirigolzarri, was optimistic about the results, highlighting that the bank had "succeeded in withstanding a very complex environment for the financial sector, maintaining high levels of profitability and solvency."

According to him, this enables the bank to raise the dividend and pay back the aid received from taxpayers. Endi