By Jesús Aguado
MADRID (Reuters) – Lending income at Spain’s Caixabank came under pressure in the third quarter from lower interest rates, even while the lender reiterated its high single-digit growth guidance for 2024 because of controlled funding costs.
While interest rates were rising, Spanish banks benefited from more lucrative loans and limited increases of deposit rates, but that tailwind is starting to reverse as interest rates are now falling.
Caixabank’s net interest income (NII), a measure of earnings on loans minus deposit costs, in the third quarter still rose 2% year-on-year to 2.79 billion euros ($3.03 billion), compared to the 2.75 billion euros forecast by analysts. The bank is Spain’s biggest by domestic assets.
NII slowed down but was still 0.1% up against the previous quarter as the cost of deposits only rose slightly by 3 basis points in the quarter.
On Thursday, Caixabank said it aimed to finish 2024 with an NII above 11 billion euros, up from 10.1 billion last year. This would be in line with its previous high single-digit NII growth guidance released in July.
The bank also announced a fifth share buy-back programme for 500 million euros that will begin at some point after November 19.
Its board also approved an interim dividend of 40% of the consolidated net profit for the first half of 2024, amounting to 1.07 billion euros, in line with its 50%-60% pay-out policy.
On Wednesday, the bank announced the appointment of a new chairman in 2025, reported a 3% year-on-year rise in net profit to 1.57 billion euros in the July to September period, slightly above forecasts.
($1 = 0.9218 euros)
(Reporting by Jesús Aguado; Editing by Inti Landauro and Nicholas Yong)
