Unicaja Banco (UNI) Q4 2023 earnings summary

Executive summary

• Net operating income rose 50.6% to €1,073M and core banking results increased 39.6% YoY, supported by strong banking-margin growth.

• Strong year-end capital and liquidity positions supported profitability improvement; fully loaded CET1 was 14.7% and LCR was 308%.

Financial highlights

• Net interest income rose 26.1% YoY to €1,353M; gross income reached €1,776M, up 10.6%, and pre-provision profit was €917M, up 23.2%.

• Net fee income increased 1.6% to €533M, including €132M in mutual fund fees.

• Consolidated net income was €267M, down 4.0% YoY; excluding the €63.8M temporary bank tax, net income was €330M.

• Operating expenses declined 0.4% to €859M; cost-to-income improved to 46.7% excluding the temporary bank tax, versus 48.4% unadjusted.

• Q4 net interest income rose 6.4% QoQ to €380M; customer spread increased 13 bps to 2.75%.

Outlook and guidance

• 2024 ROTE target is above 9%, adjusted for a 12.5% fully loaded CET1 ratio and assuming residual DGF and SRF charges; 2023 ROTE was 4.7% reported.

• Planned shareholder returns include a 50% net-income dividend payout and a buyback of up to €100M, or 3.8% of capital, subject to approval.

• Delayed repricing of floating-rate loans and higher rates on new production were expected to support retail NII from early 2024.