April 4, 2013 / 6:27 PM / 7 years ago

German market watchdog finds Banesto overstated 2010 profits

FRANKFURT, April 4 (Reuters) - German financial markets watchdog Bafin discovered that Spanish bank Banesto overstated its 2010 pretax profits by 119.6 million euros ($153.7 million), the lender said on Thursday.

Banesto said in a statement that it had failed to use the closing stock price of 5.59 euros per share to value its financial holding in real estate firm Metrovacesa.

Instead it incorrectly employed a model for valuing an asset up for sale that determined a price of 24.4 euros per share.

“Valuing the shares with the aid of a model violates international accounting standards, since there was an active market for shares of Metrovacesa,” it said in the statement.

When contacted, the bank declined to provide further details.

Spanish bank Santander has said it plans to end the 110-year-old Banesto brand as it fully absorbs its local subsidiary to cut costs.

Banesto, 90 percent owned by Santander, is the country’s seventh-biggest lender with around 100 billion euros in assets and employs over 8,000 people.

$1 = 0.7780 euros Reporting by Christiaan Hetzner; Additional reporting by Jesus Aguado in Madrid; Editing by Dale Hudson

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