Spain's Bankinter beats profit forecasts, sees stronger lending income
Bankinter's Q2 Performance and Outlook
By Jesús Aguado
Profit Growth Driven by Lending and Fees
MADRID, July 23 (Reuters) - Spain's Bankinter on Thursday beat forecasts with a 16% rise in net profit in the second quarter helped by higher fees, loans and a recovery in lending income.
Impact of Market Rates and Lending Margins
Spanish banks have benefited from variable-rate lending, but lower interest rates have squeezed margins. Recent geopolitical tensions have pushed market rates higher, with further increases expected.
Net Interest Income and Lending Trends
Bankinter's net interest income, earnings on loans minus deposit costs, rose 5% year-on-year in the second quarter to €589 million - compared with forecasts of €586 million - supported by a rise in loan yields.
Executive Outlook on NII Growth
Against that backdrop, Chief Financial Officer Jacobo Diaz said: "We expect NII to continue growing quarter by quarter, allowing us to reach the upper end of our mid-single-digit growth ambition, above our expected lending growth for the full year."
Lending Income and Funding Costs
Lending income at Spain's fifth-largest bank was also up 3% against the first quarter helped by lower funding costs though the bank expects them to rise from current low levels.
Analyst Expectations and Market Reaction
Net profit rose to €315 million ($360 million) in the April-June period, above the €294 million expected by analysts, backed by a 23% year-on-year rise in fees in the second quarter and a 3.7% rise in loans in the first half.
At 0750 GMT, shares in Bankinter rose 0.6% compared to a 0.4% decline in Spain's blue-chip index Ibex-35.
Broker Commentary and Regional Performance
Spanish broker Renta 4 said Bankinter's results were also helped by lower-than-expected costs though loan growth remained "below the bank's full-year target, although Portugal and Ireland continued to show strong momentum with lending growth of about 8% and 24%, respectively."
(Reporting by Jesús Aguado; additional reporting by Emma Pinedo; Editing by David Latona and Louise Heavens)
