Spain's Unicaja net profit rises on higher fees, lower overall provisions (updated)

Unicaja Banco SA

05/05/2026 06:55

Q1 net rises 1.4% to 161 mln euros, above forecasts

Q1 NII rises 1.3% y/y, falls 1.2% q/q

Sees NII and profits in 2026 above 2025 levels

Rewrites with forecasts, NII, details; paragraphs 5-10

By Jesús Aguado

MADRID, May 5 (Reuters) - Spanish bank Unicaja UNI.MC forecast a recovery in lending income, supported by a rise in loans on the back of the country's solid economy, though lower rates pressured margins in the first quarter.

Banks in Spain are mainly retail lenders and have benefited from higher costs of loans tied mostly to variable rates, but recent reductions in borrowing costs are squeezing margins.

However, tension from the U.S.-Israeli war on Iran is triggering a rise in inflation and markets are pricing in three rate hikes by the year's end.

Net interest income (NII), a measure of earnings on loans minus deposit costs, rose 1.3% year-on-year to 373 million euros in the first quarter, in line with forecasts, though it fell 1.2% from the previous quarter, partly on fewer working days.

For this year, the country's sixth-largest lender by market value expects an NII above the 1.495 billion euros recorded in 2025.

Shares in Unicaja, which more than doubled in value last year, were almost unchanged at 0830 GMT, after Spanish broker Renta 4 said results were in line, with the bank reiterating targets for this year.

Net profit in the quarter rose 1.4% on the year to 161 million euros versus forecasts of 153 million, helped by a decline of more than 20% in loan loss provisions and a rise of 3% in fees.

For 2026, the bank expects net profit to finish above the 632 million euros booked in 2025.

Costs, however, rose 4.5%, in line the bank's mid-single-digit guidance for the year, driven by IT investments, new hirings and wage increases.

Its performing loan book rose 2.4% year-on-year in the first quarter, driven by a rise in corporate and consumer loans.

        ($1=0.8466 euros)

 (Reporting by Jesús Aguado; Editing by David Latona and Clarence Fernandez)

 ((jesus.aguado@thomsonreuters.com; +34 91 835 68 32; Reuters Messaging: Reuters Messaging: jesus.aguado.reuters.com@reuters.net))