Caixabank (CABK.MC) surpassed first-quarter net profit predictions on Friday, buoyed by higher loan income, which the Spanish bank predicted will climb more than 30% in 2023 after boosting its outlook. However, retail deposits fell compared to December.
Higher interest rates are boosting European banks, as Caixabank’s net interest income (NII) jumped 49% to 2.16 billion euros, topping analysts expectations of 2.02 billion euros.
After adopting new accounting rules, Caixabank raised its 2023 loan income projection to 8.75 billion euros, up 34% from 6.53 billion in 2022.
This year’s comparable NII guidance was 8.5 billion euros.
Caixabank climbed 2.8% at 0730 GMT after sliding 13.7% this year.
JP Morgan praised the updated loan income outlook, noting that “fees & insurance and cost guidance remain unchanged, which should drive mid-single-digit upgrades to consensus estimates.”
Despite a 373 million euro banking levy, the bank’s January-March net profit rose 21% to 855 million euros ($944.1 million). Reuters analysts predicted a 643 million euro profit.
Insurance services earnings surged 24% at the nation’s largest lender by domestic assets.
Loan-loss provisions jumped 12% year-over-year, while the cost of risk, which assesses future losses, rose to 26 basis points from 25 bps in December.
It reduced its 2023 cost of risk projection to 30 bps from 40 bps.
Caixabank retail deposits declined 1.4% in March from December.
After the collapse of Silicon Valley Bank (SVB) in March, global banking jitters focused on bank deposit levels.
Caixabank had 192% liquidity coverage in March, down from 194% in December.
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