Unicaja's Q3 net profit rises 14% on lower provisions

Reuters

Unicaja's Q3 net profit rises 14% on lower provisions

7:02 sáng giờ GMT, 30 Tháng 10 2024

<html xmlns="http://www.w3.org/1999/xhtml"><head><title>UPDATE 2-Spain's Unicaja nudges up lending income forecast</title></head><body>

Q3 net profit 157 mln euros vs forecast 156 mln euros

Q3 NII up 7.4% y/y, beating forecasts, up slightly q/q

2024 NII growth now seen over 10% vs around 10% before

Shares up 3%

Rewrites to lead on lending income

By Jesús Aguado

MADRID, Oct 30 (Reuters) -Spain's Unicaja UNI.MC on Wednesday nudged up its forecast for growth in lending income this year, as lower than anticipated funding costs ease the pressure from falling interest rates.

As interest rates rose, Spanish banks benefited from increasing the cost of loans and limiting the increase in deposit rates, but that tailwind is starting to reverse as interest rates fall back.

However, Unicaja said it expected net interest income (NII) - a measure of earnings on loans minus deposit costs - to increase by more than 10% this year, compared with its previous estimate of around 10%.

Its NII in the third quarter increased 7.4% year-on-year to 384 million euros ($416 million), above the 372 million euros forecast by analysts polled by Reuters. Its cost of deposits held stable, while customer spreads - a measure of funding costs - dipped only slightly to 2.75% from 2.8% the quarter before.

NII rose 0.1% from the second quarter despite the impact of a lower Euribor, the benchmark banks use to set the price for mortgage loans.

Brokerage Jefferies highlighted solid "margin dynamics" thanks to stable cost of deposits.

Shares in Unicaja, Spain's sixth-biggest bank by market value, were up more than 3% at 1024 GMT, while Spain's leading blue-chip index .IBEX was down 0.5%.

The bank's net profit rose 14% to 157 million euros in July-September, in line with the 156 million euros expected by analysts polled by Reuters.

A decline of 36% in overall provisions supported earnings.

Higher earnings helped Unicaja increase its return-on-tangible equity ratio (ROTE), a measure of profitability, to 6.8% at the end of September from 6.5% at the end of June.

Unicaja's fully-loaded capital ratio, the strictest measure of solvency, rose to 15.4% from 15.1% at end of June.

($1 = 0.9079 euros)

Reporting by Jesús Aguado; Editing by David Latona and Mark Potter

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