Published by Global Banking and Finance Review
Posted on January 30, 2025
By Jesús Aguado
MADRID (Reuters) -Lending income at Spain's Caixabank came under pressure in the fourth quarter due to lower interest rates, though the lender managed to offset the impact with a rise in net fees and commissions.
The bank reported net profit of 1.54 billion euros ($1.70 billion) in the September-December period, slightly above the 1.43-billion-euro forecast by analysts.
Caixabank also unveiled a sixth share buyback programme worth 500 million euros, meeting its target of distributing 12 billion euros to shareholders as outlined in its 2022-2024 strategic plan.
As interest rates rose, Spanish banks benefited from higher lending rates and limited deposit payouts. However, this tailwind is beginning to reverse as interest rates start to decline.
In this context, net fees and commissions rose 9.2% year-on-year in the reported quarter, as banks aimed to lift non-core banking revenue, a key focus outlined in its three-year strategic plan announced in November.
Caixabank's net interest income - a measure of earnings on loans minus deposit costs - fell 0.3% year-on-year to 2.74 billion euros, compared with 2.71 billion euros forecast by analysts. NII fell 1.9% from the previous quarter.
Caixabank said that it expected a mid-single digital decline in 2025, compared with the 11.11 billion euros booked in 2024.
The company's board also approved a total cash payout of 53.5% against the consolidated net profit for 2024, equivalent to 2.03 billion euros, after proposing a cash gross dividend of 0.2864 euros per share. This dividend proposal was within its 50%-60% pay-out policy.
For the full year, net profit at the country's biggest bank in terms of domestic assets rose 20.2% year-on-year to 5.8 billion euros, slightly above forecasts.
(Reporting by Jesús Aguado; Editing by Inti Landauro and Sherry Jacob-Phillips)
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