CaixaBank (CABK) Q1 2025 earnings summary

Executive summary

• Net attributable profit for Q1 2025 reached €1.47 billion, up 46.2% year-over-year, driven by higher revenues, lower provisions, and strong service income, marking a robust start to the 2025-2027 Strategic Plan.

• Customer funds increased 8.5% year-over-year to €691 billion, with strong net inflows into deposits and wealth management; performing loans rose 3% year-over-year.

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

• Digital transformation and AI initiatives are advancing, with digital customers surpassing 12.2 million and business volume exceeding €1 trillion.

• Ample liquidity (LCR at 197%) and robust capital (CET1 at 12.5%) support ongoing growth and shareholder returns.

Financial highlights

• Net interest income declined 4.9% year-over-year to €2.65 billion, mainly due to lower market rates and day-count effects, but is expected to stabilize.

• Gross income rose 14.7% to €4.01 billion, with service revenues up 6.8% and wealth management income up 16.5%.

• Operating expenses increased 4.8% year-over-year, in line with IT investment plans; cost-to-income ratio improved to 37.7%.

• Loan-loss charges fell 27.3% year-over-year, with total 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%-12.5%, with the upper limit as a threshold for extraordinary capital distributions.

• Dividend policy targets a 50–60% payout, with ongoing share buybacks and interim/final dividends planned.

• NII for 2026 expected at or above 2025 levels, with 2025 seen as the trough in the cycle.