Spanish bank Banco de Sabadell SA has registered a 59% drop in its net profit for the third quarter of 2009. The company has also issued warnings that the bad run is expected to continue in 2010 also.

Mr. Jaime Guardiola, Chief Executive Banco Sabadell made a statement that 2010 would going to be a difficult year and there would be considerable stress on banking sector. He also said that the lending margins would suffer and the banking activity would be weak.

Moreover, the banks still need to check out the faulty loans.

Banco Sabadell’s problematic loans have climbed up to 2.5 billion Euros in third quarter, which is about 3.5 per cent of the total loans as against 1.59 per cent last year.

The Spanish bank has posted a net gain of 136.4 million Euros in third quarter as compared to a profit of 333.7 million Euros previous year. This is a huge 59% decline in net profit.

Sabadell’s shares were down by 1.7% to EUR4.78. The overall Spanish market was down by 1 per cent.