Published by Global Banking and Finance Review
Posted on April 28, 2025
By Jesús Aguado
MADRID (Reuters) -Spain's Unicaja struck a cautious outlook for its lending income in 2025 after margins came under pressure in the first quarter due to lower interest rates while net profit topped forecasts thanks to a lower impact from the renewed banking tax.
Spanish banks are mainly retail lenders and have benefited from higher costs of loans tied mostly to variable rates but recent reductions in borrowing costs are squeezing margins.
In that context, Unicaja's net interest income, a measure of earnings on loans minus deposit costs, in the quarter fell 5.6% against the previous quarter to 369 million euros, compared to analysts' forecasts of 367 million euros.
The bank reiterated its goals announced in February when it guided for a NII of above 1.4 billion euros, a decline from the 1.54 billion euros in 2024.
Customer spreads decreased by 12 basis against the previous quarter as yield on loans declined 20 bps while cost of deposits fell just 8 basis points.
At 0716 GMT, shares in Unicaja rose 0.9% after having fallen 1% in the last month. Spain's blue-chip index was up 0.6%.
The bank's performing loan book fell 2.1% year-on-year in the quarter but rose by 0.3% against the previous quarter supported by a more benign economic outlook in its home market.
New mortgage lending rose 37% in the quarter against the same period a year ago, while new business lending and consumer lending rose 49% and 33%, respectively.
Net profit in the quarter rose 43% to 158 million euros, above analysts' forecasts of 132 million euros as it booked just around 5 million euros against the new banking levy, a spokesperson for the lender said.
Unicaja adjusted the impact on a linear quarterly basis based on current tax legislation, in contrast to the previous year when the entire 79 million euros were booked in the first quarter.
(Reporting by Jesús Aguado; editing by David Latona and David Evans)
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