Unicaja Banco (UNI) Q2 2024 earnings summary

Executive summary

• Net income nearly doubled year-over-year to €294 million in H1 2024, driven by higher revenues, lower provisions, and improved efficiency.

• Customer funds grew 2.7% year-over-year, with off-balance sheet funds up 2% and mutual funds up 7%.

• Performing loans grew 1.5% in the quarter, reversing previous declines, with new lending up 14% quarter-on-quarter.

• Digitalization advanced, with 70% of customers now digital and significant remote activity in loans and funds.

• Sustainability initiatives progressed, including a 57% increase in CO2 emissions avoided via green bonds and €1.3 billion in green bonds issued since 2022.

Financial highlights

• Banking margin increased 27% year-over-year; cost-to-income ratio improved to 45%.

• Net interest income rose 25.7% year-over-year, despite a 1.3% quarterly decline.

• Fees declined 3.5% quarter-on-quarter and 5% year-over-year due to commercial campaigns for loyal clients.

• Pre-provision profit up 35% quarter-on-quarter and 39% year-over-year.

• Total provisions fell 30% year-over-year, supporting profit growth.

Outlook and guidance

• NII growth guidance upgraded to close to 10% for 2024, up from low single digits.

• Cost of risk expected at the low end of the 30–35 bps range, possibly better.

• Fee income expected to decline mid-single digit for 2024 due to ongoing commercial campaigns.

• Loan growth expected to stabilize, with mortgages picking up and corporate lending still decreasing.

• Return on tangible equity (ROTE) target raised to above 10% for 2024.