UPDATE 2-Caixabank sees strong lending income growth in 2023 after profit beats

Kitco Media
By Reuters
Published:
Updated:
Reuters



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2022 net profit on like-for-like basis up 29.7%



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Sees NII growing around 30% in 2023

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Aims to maintain payout policy of 50-60% this year



(Adds full-year net figures, NII outlook) By Jesús Aguado MADRID, Feb 3 (Reuters) - Spain's Caixabank beat market expectations with both its fourth-quarter and full-year net profit, helped by higher banking margins, and sees its lending income in 2023 surging about 30% on the back of higher interest rates. Its 2022 net profit rose 29.7% on a like-for-like to 3.15 billion euros ($3.43 billion) against 2021, stripping out accounting gains from the acquisition of former rival Bankia. Analysts expected the country's biggest domestic bank to report a net profit of 3.05 billion euros. Taking into account the 4.3 billion "bad will" gain - a paper profit made when an asset is bought below its book value - from the Bankia takeover in 2021, net profit was down 39.8%. For the fourth quarter, net profit jumped 62% to 688 million euros, beating forecasts of 620 million euros. Earnings were boosted by stronger-than-expected net interest income (NII) and lower costs. Banks in Europe are beginning to benefit from higher interest rates, but some are setting aside more bad debt provisions due to an uncertain economic environment. Caixabank's cost of risk, which manages credit risks and potential losses, rose to 25 basis points from 23 basis points at end-September. The lender said it expected its cost of risk to rise to less than 40 basis points this year. Loan loss provisions rose 26% year-on-year in the quarter. NII, or earnings on loans minus deposit costs, rose 33% year-on-year to 2.07 billion euros in the fourth quarter, beating forecasts of 1.88 billion euros. In 2022, lending income was 16% higher than in 2021, at 6.92 billion euros, and the bank sees it rising about 30% to 9 billion euros this year, supported by higher loan yields. Caixabank proposed to shareholders a gross cash dividend of a 0.2306 euros per share against 2022 earnings, up 58% on 2021, and equivalent to a 55% pay-out.


It aims to maintain its 2022 dividend cash pay-out policy of 50-60% for 2023. ($1 = 0.9182 euros) (Reporting by Jesús Aguado Editing by Inti Landauro and Mark Potter)

Messaging: Reuters Messaging: jesus.aguado.reuters.com@reuters.net))
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