CaixaBank Raises Interest Income as Margin Narrows
Second-quarter net interest income rose 2.5% to €2.729 billion despite higher funding costs.
CaixaBank (CABK), the Spanish lender, increased second-quarter net interest income 2.5% from the first quarter to €2.729 billion, reversing a 2.0% decline in the prior period. Higher lending and customer-fund volumes and a larger, higher-yielding debt-securities portfolio outweighed increased deposit and institutional-funding costs.
The annualized net-interest-income yield on average assets narrowed 1 bp to 1.62%. Asset yield rose 2 bps to 2.65%, while funding cost increased 3 bps to 1.03%, leaving volume growth to carry the increase in interest income.
Gross customer loans rose 4.6% QoQ to €406.233 billion, accelerating from 1.0% growth in the first quarter, though the closing balance included advance double payments to pension holders. Customer funds increased 5.2% to €771.943 billion after growing 0.3% in the prior quarter.
Service revenue rose 1.8% QoQ and 7.3% YoY to €1.398 billion. Wealth-management revenue increased 14.9% YoY to €555 million, and protection-insurance revenue gained 15.6% to €332 million, providing the main fee-related growth as banking fees fell 4.0% to €511 million.
Trading income declined 31.1% QoQ to €45 million, while equity-accounted earnings rose 18.7% to €94 million. Administrative expenses, depreciation and amortization increased 1.0% to €1.668 billion, and the trailing cost-to-income ratio held at 39.6%, though it was 100 bps higher than a year earlier.
CaixaBank's CET1 ratio held at 12.5% as risk-weighted assets increased by €4.887 billion to €251.487 billion. The ratio included a 20-bp deduction for a new €500 million share buyback, of which €135 million, or 27.1%, had been executed by quarter-end.
Credit quality improved even as quarterly provisioning increased. Nonperforming loans fell by €508 million to €7.839 billion, lowering the NPL ratio 20 bps to 1.78%, while coverage rose 2 percentage points to 81%.
Allowances for insolvency risk rose 6.4% QoQ to €247 million, reversing the first quarter's 18.6% decline, and the trailing cost of risk edged up 1 bp to 24 bps. The combination left CaixaBank entering the second half with lower problem-loan balances and a modestly higher provisioning rate.