Unicaja had earned 158 million by March, 43% more than a year ago

Unicaja earned 158 million euros between January and March 2025, 43% more than during the same period last year, when its profit was 111 million euros. The profit of the Malaga-based banking group is mainly attributed to the evolution of net interest income, which the entity described as "robust" in a statement sent to the national securities market commission (CNVM): it reached 370 million euros, though this figure is still 5.6% lower than the previous year. The fall in official interest rates resulted in an 11.9% drop in interest income - what is charged to customers - to 610 million euros. However, the interest expenses - the remuneration paid to customers for their savings - fell even more, by 20.1%, to 241 million euros.

More details about interest rates: the cost of deposits has decreased from 0.72% at the end of 2024 to 0.64% at the end of the first quarter of 2025. Meanwhile, the yield on loans has fallen from 3.33% to 3.13% over the same period.

Meanwhile, net fees and commissions grew 1.6% year-on-year to 132 million euros. This evolution exceeded the bank's expectations and is due to the good performance of off-balance sheet funds, i.e. pension plans and mutual funds. In fact, net fees on mutual funds grew 7.6% quarter-on-quarter and 17% year-on-year, as a result of the increase in the volume managed.

The third pillar supporting the group's result is the reduction in the item 'other operating income and expenses', which previously included the temporary levy on credit institutions. In the first quarter of 2024, this tax amounted to 79 million euros. It has now been replaced by a tax on net interest income and commissions, which the Unicaja Group has accrued under the benefits tax section -these subtracted 69 million from the profit in the first quarter.

Gross income amounted to 515 million euros - an increase of 11.5% year-on-year.

From this amount, administrative expenses must be deducted, which rose by 4.7% compared to a year ago, to 212 million euros. Within these, personnel expenses - the most important - increased by 5.2% to 142 million euros.

Also subtracted from the profits are provisions, which have risen 13.2% year-on-year to 22 million euros.

After accounting for income and expenses, the result is a profit of 158 million euros, 43% higher - or 48 million euros more - compared to the same period last year.

According to the 2025-2027 strategic plan that the group presented at the beginning of the year, the objective is to reach 1.6 billion euros in profit over these three years, meaning that it should earn slightly more than 500 million euros in each of these three years. During the financial 2024, its profit was 573 million euros. If the result for the first quarter is annualised, i.e. if the profit is multiplied by four, as it is projected that the bank can maintain the figure for the next three quarters, the result is 638 million for the whole year.

With the figures presented at this stage of the 2025 financial year, the bank was able to improve its efficiency ratio by 3.1%, to 45.6%. Profitability measured by ROTE improved by 4.3%, to 9.7%.

The financial group highlighted that the evolution of the accounts has been accompanied by an improvement in the quality of the balance sheet. Some numbers support this idea: the NPL ratio is down to 2.58% from 2.7% at the end of 2024 or 3% twelve months ago.

Moreover, this coincided with an improvement in coverage ratios: the NPL ratio stood at 70.4% from 67.9% at the end of 2024; while that of foreclosed real estate assets was 76.1% from 75.6% at the end of last year. This is due to the effort in hedging (risk coverage) and the reduction in the inflow of loans considered as doubtful, as well as the speed of their outflows. Doubtful balances closed the first quarter at around 1.2 billion euros, 4.8% lower than at the end of 2024, and 15.7% lower than twelve months ago. Foreclosed loans amounted to 843 million euros at the end of the first quarter, compared to 905 million in December 2024 and 1.2 billion a year ago.

Regarding solvency, as of 31 March, the ratio of benchmark capital to risk-weighted assets stood at 15.4% - an improvement of 88 basis points compated to the levels of 12 months ago and 27 basis points over the quarter. With this, according to the bank's calculations, it has a capital surplus of two billion euros over regulatory requirements.

The bank's dividend policy includes distributing 60% of its profits among shareholders, to which an additional 25% will be added from next year, resulting in a 'pay -out' (percentage of profits that is distributed as dividends) of 85%. These are the terms set out in the financial group's new strategic plan, effective since January.

In terms of liquidity, according to the indicator that measures the extent to which retail deposits could finance loans, it stands at 69.2%.

How did the balance sheet, i.e. the administration of customer funds and the granting of loans, evolve? Starting with the latter, the balance of non-doubtful loans and advances returned to growth with a rise of 0.3%, to 46.5 billion euros. The entity has granted 2.6 billion euros in new loans and credits, which represents a 47.7% increase compared to the previous year, including 714 million euros in mortgages for individuals, giving it a market share of 5% nationwide, a proportion that is higher in regions like Malaga, Seville and Madrid. All in all, the mortgage portfolio fell by 0.3% in the quarter and by 2.1% in the last twelve months, although, according to the bank, the pace of repayments is slowing down.

The consumer credit portfolio grew 1.4% in the quarter and 5.8% year-on-year, driven by the increase in new lending and in line with the strategic plan 2025-2027, which seeks growth in this segment and also in the corporate area to diversify revenue.

Funds under management amounted to 105.1 billion, up 3.1% in the first quarter and 4.9% year-on-year. Retail funds amounted to 92.4 billion euros, down 1.2% from the end of last year, but up 4.9% from a year earlier. Off-balance sheet funds (insurance, mutual funds and pension plans) rose 9.4% to 23.4 billion, mainly due to the boost from mutual funds, which grew 22% year-on-year and 6.6% quarter-on-quarter to 14.4 billion. Subscriptions in mutual funds tripled to 958 million euros in the first quarter, an all-time high. Accumulated assets in these products amounted to 14.4 billion.

In the early movements of the stock exchange session, Unicaja shares were up 1.25%.