Lower lending income contributed to a 52% drop in net recurring profit at Spain's Caixabank in the fourth quarter, along with the impact of lower one-off gains.
A woman uses a Caixabank branch ATM machine displaying logos of both Caixabank and Bankia banks in Madrid, Spain, November 10, 2021. REUTERS/Susana Vera2021 net profit up almost fourfold due to accounting gainRaises pay-out policy to between 50-60% of 2022 earningsMADRID, Jan 28 - Lower lending income contributed to a 52% drop in net recurring profit at Spain's CaixabankSpain's largest domestic lender which last year closed a 4.
Caixabank's 2021 net profit rose to 5.23 billion euros thanks to some 4.3 billion euros of "bad will" - a paper profit made when an asset is bought below its book value - on the Bankia purchases and charges of 1.4 billion euros which were mainly related to layoff costs.In the fourth quarter of 2020, Caixabank had booked more than 400 million euros in capital gains from the sale of a minority stake in a payments unit.
"Focus likely to be on another quarter of weaker NII though revenues were actually 5% ahead thanks to stronger fee & trading income," Jefferies said in a note to clients. To offset this impact, banks are looking for other areas of growth such as commission fees or insurance income. At Caixabank, net fees in the quarter rose 10.8% year-on-year.
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