CaixaBank (CABK) Q1 2025 earnings summary

Executive summary

• Q1 2025 net income rose 46.2% year-over-year to €1,470 million, driven by higher service revenues, lower provisions, and accelerating client growth.

• Customer funds increased 8.5% year-over-year to €691 billion, with strong net inflows into deposits and wealth management.

• Non-performing loan (NPL) ratio dropped to a historical low of 2.5%, with cost of risk at 0.25% and NPL coverage at 70%.

• CET1 ratio at 12.5%, with robust liquidity (LCR at 197%) and ongoing share buybacks.

• Digital transformation and AI initiatives are enhancing client experience and operational efficiency.

Financial highlights

• Net interest income (NII) was €2,646 million, down 4.9% year-over-year, mainly due to lower rates and day-count effects.

• Service revenues increased 6.8% year-over-year, with wealth management up 16.5%.

• Operating expenses rose 4.8% year-over-year, with cost-to-income ratio at 37.7%.

• Loan-loss charges fell 27.3% year-over-year, with cost of risk at 0.25% and provision funds at €7.0 billion.

• Book value per share up nearly 9% year-over-year to €5.50.

Outlook and guidance

• FY25 guidance reiterated: NII expected to decline mid-single digit, service revenues to rise low-to-mid single digit, and operating costs to increase by about 5%.

• Cost of risk for FY25 guided below 0.30%, with potential for further improvement.

• CET1 management target set at 11.5%-12.25%, with cash payout target of 50-60%.

• Sixth share buyback program of €500 million announced, following completion of the fifth.

• Dividend policy for 2025 targets 50–60% payout, with interim and final dividends planned.