Unicaja’s Spanish first-quarter net profit falls as lending revenue declines
Band Jesus Aguado
MADRID, April 27 (Reuters) – The Unicaja of Spain UNI.MC said on Wednesday its net profit fell 8.5% in the first quarter from the same period a year ago, as ultra-low interest rates continued to squeeze financial margins.
The lender reported a net profit of 60 million euros ($63.9 million) in the January-March period. Analysts polled by Reuters had expected a net profit of 62 million euros.
As part of a defensive deal struck in late July to protect against the pressure of ultra-low interest rates and the impact of the COVID-19 pandemic, Unicaja bought Liberbank to create Spain’s fifth largest bank in terms of ‘assets.
In the same quarter of 2021, Unicaja recorded a net profit of €66 million combining the activities of Liberbank on a pro forma basis.
Net interest income, or loan income less deposit costs, fell 15.2% year-on-year to 235 million euros in the first quarter. Analysts expected it to be 236 million euros.
Banks across Europe are under increasing pressure from rising bad debts and historically low interest rates, prompting lenders to look for other areas of growth, such as fees generated in the private bank.
At Unicaja, net commissions increased 14.3% in the quarter compared to the same period a year ago, although they were down 0.7% compared to the previous quarter.
Under a recently announced new three-year strategic plan, the lender is counting on fee income, cost savings and a push towards consumer lending to drive profitability.
($1 = 0.9391 euros)
(Report by Jesús Aguado, edited by Inti Ladnauro and Uttaresh.V)
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