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MADRID, May 5 (Reuters) – Spain’s Caixabank (CABK.MC) on Friday beat first-quarter net profit forecast, helped by higher lending income and a solid performance at its insurance business, even as retail deposits dipped compared to December.
The lender reported a 21% rise in net profit to 855 million euros ($944.1 million) in the January to March period, despite a 373 million euros impact from a new banking levy. Analysts polled by Reuters expected a profit of 643 million euros.
Earnings at the country’s biggest lender by domestic assets were also supported by the dividend income of 61 million euros from its 3.5% stake in telecom company Telefonica SA (TEF.MC) despite a 12% rise in loan loss provisions.
Banks across Europe are benefiting from higher interest rates, and Caixabank’s net interest income (NII) rose 49% year-on-year to 2.16 billion euros, beating the 2.02 billion euros analysts expected.
Following the implementation of new accounting standards, it updated its 2023 guidance for lending income to 8.75 billion euros, implying a rise of 34% against 6.53 billion in 2022.
The previous NII guidance for this year was around 9 billion euros without the new accounting, or around 8.5 billion euros on restated figures.
Its insurance service results, which accounted for around 12% of its lending income, rose 23.6%.
By the end of March, deposits from retail clients at Caixabank fell 1.4% against December.
Deposit levels at banks have come into sharper focus after the collapse of U.S. lender Silicon Valley Bank (SVB) in March sparked jitters across the global banking sector.
At the end of March, Caixabank ended with a liquidity coverage ratio of 192%, compared to 194% at the end of December. A ratio above 100% means they don’t need to tap the markets in the short term to cover for potential outflows of funds.
($1 = 0.9056 euros)
Reporting by Jesús Aguado, editing by Inti Landauro
Our Standards: The Thomson Reuters Trust Principles.
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