CaixaBank (CABK) Q2 2025 earnings summary

Executive summary

• Net income for H1 2025 reached €2.951 billion, up 10.3% year-over-year, with strong business activity, capital strength, and improved guidance for FY25.

• Customer funds rose 7.5% to €717.65 billion, performing loans increased 4.8% to €368.57 billion, and digital transformation accelerated with significant client growth and AI adoption.

• NPL ratio improved to a record low of 2.3% with 70% coverage and ample liquidity (LCR 217%, NSFR 150%).

• Market leadership reinforced in Spain and Portugal, supported by digital platforms, sector-specific offerings, and multiple awards for banking and digital excellence.

• Strategic transformation initiatives advanced, including new digital platforms and offerings for senior customers.

Financial highlights

• Net interest income was €5.28 billion, down 5.2% year-over-year due to lower market rates, while gross income rose 4.4% to €8.04 billion and operating income increased 4% to €4.86 billion.

• Service revenues grew 5.4% to €2.58 billion, with wealth management up 14.3% and banking fees up 1.5%.

• Administrative expenses, depreciation, and amortisation rose 5% to €3.18 billion; cost-to-income ratio at 38.6%, outperforming European peers.

• Allowances for insolvency risk dropped 23.5% to €372 million, with cost of risk at 0.24%, the lowest in 18 months.

• EPS (12 months) reached €0.85; ROE at 15.7%; dividend income fell 40.6% after the sale of the Telefónica stake.

Outlook and guidance

• FY25 guidance improved: service revenues expected to grow mid-single-digit, cost of risk to remain around 0.24–0.25%, and ROTE above 16%.

• NII expected to stabilise, with improvement anticipated from 2H26; deposit growth expected to outperform strategic plan targets.

• Internal CET1 target ratio set between 11.5% and 12.5%, with extraordinary capital distributions above 12.25%.

• Interim dividend payout of 30–40% of net profit for 1H 2025 planned for November, with a final dividend in April 2026.

• Management expects continued GDP growth in Spain (2.4% forecast for 2025) and stable domestic demand.