Investing.com -- Shares of Unicaja Banco (BME:UNI) climbed 4.3% following the release of its fourth-quarter earnings, which outperformed market expectations.
The Spanish financial institution reported a net interest income (NII) of €381 million for the fourth quarter of 2024, marking a slight decrease year-over-year but exceeding consensus estimates by 5%. The better-than-expected NII was primarily attributed to higher income from the fixed income portfolio, now valued at €27.8 billion, and an increased liquidity position.
The company's total revenues for the quarter reached €521 million, showcasing an 18% rise year-over-year and 6% above consensus. This was bolstered by fee income and trading income, which also surpassed market expectations. Despite a year-over-year decrease in customer loans, Unicaja Banco saw a growth in customer deposits excluding repos, which went up by 4% compared to the same period last year.
Operational expenses were reported at €230 million, up 5% year-over-year but remained 1% below consensus predictions. The cost of risk came in at approximately 20 basis points, significantly lower than consensus estimates by about 28%. The bank's non-performing loan (NPL) ratio improved, decreasing by 10 basis points quarter-over-quarter to 2.7%, while the gross non-performing asset (NPA) ratio saw a 30 basis point reduction to 4.5%.
Looking ahead, Unicaja Banco provided an updated guidance for 2025, with NII expected to exceed €1.4 billion, suggesting a potential 2% upside to consensus net profit estimates for the year. The bank also provided guidance for 2026 and 2027, with annual NII anticipated to be greater than €1.4 billion for both years, indicating a potential 10% increase in consensus net profit estimates.
Citi analysts commented on the results, stating, "We expect the market to have a positive initial reaction, given the NII beat and better capital distribution targets for 2025-27E."
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