(Adds breakdown on Q3 results)
MADRID, Oct 25 (Reuters) - Banco Sabadell said on Friday its third-quarter net profit almost doubled from a year earlier, when the Spanish lender took one-off costs related to its British unit.
Net profit came in at 251 million euros ($279 million) for the quarter ended September, compared with 127 million euros a year ago, when the company recorded 88 million euros ($97.8 million) charges related to an IT outage at its British unit TSB.
Analysts had expected a profit of 231 million euros in a Reuters poll.
To offset pressure at home, Spanish banks have been expanding abroad in search of higher revenues but Sabadell’s acquisition of British bank TSB in 2015 backfired when IT glitches sent TSB’s costs spiralling. Last year, TSB racked up losses of 240 million euros.
A tough environment for lending due to ultra-low interest rates squeezed the lender’s net interest income (NII), a measure of earnings on loans minus deposit costs, in the third quarter.
NII fell 2.9% to 906 million euros while analysts had expected 900 million euros.
Like many other European banks, Spanish lenders are struggling to increase their earnings from lending because of ultra-loose monetary policy.
On Thursday, the European Central Bank said it expected interest rates to remain at present levels until it had seen the inflation outlook converge towards its target.
In this environment Sabadell lowered in July, before the ECB cut rates deeper into negative territory in September, its NII guidance to between 0 and -1% in 2019.
It had previously forecast NII growth of 1%-2% for 2019.
On Friday, Sabadell also announced a 0.02 euros gross per share interim dividend against 2019 results.
$1 = 0.9007 euros Reporting By Jesús Aguado; editing by Ashifa Kassam and Subhranshu Sahu