Unicaja Banco Q1 2025 presentation: Net profit surges 43% as lending activity accelerates

Introduction & Key Results

Unicaja Banco (BME:UNI) reported a strong start to 2025, with first-quarter results showing significant improvement in profitability and business activity. According to the company’s Q1 2025 results presentation released on April 28, 2025, Unicaja achieved a net profit of €158 million, representing a 43% increase compared to the same period last year and a 29.5% improvement quarter-over-quarter.

The bank’s adjusted return on tangible equity (ROTE) reached approximately 11%, while its efficiency ratio improved to 46%, a 3 percentage point improvement from Q1 2024. These results support the bank’s 2025 profitability targets as outlined in their guidance.

As shown in the following key highlights from the presentation:

Detailed Financial Performance

Unicaja’s income statement revealed mixed results across different revenue streams. Net interest income (NII) came in at €369 million, showing a 3.1% decrease quarter-over-quarter and a 5.6% decline year-over-year, reflecting some pressure on margins in the current interest rate environment.

However, net fees remained stable at €132 million, up 0.9% from the previous quarter and 1.6% year-over-year. The bank’s gross margin reached €515 million, representing an 11.5% increase compared to Q1 2024, while operating expenses totaled €235 million, up 4.5% from the same period last year.

The detailed income statement shows the components driving the strong bottom-line growth:

A closer examination of the net interest income evolution reveals the factors affecting this key revenue component:

The bank’s fee income showed resilience, with total net fees reaching €132 million in Q1 2025. The fee income breakdown indicates a diversified revenue stream, with mutual funds accounting for 49% of fee income, followed by insurance (28%), non-banking fees (21%), and payments and accounts (6%).

Asset Quality and Capital Position

Unicaja continued to improve its asset quality metrics during the quarter. Non-performing loans (NPLs) decreased by 5% quarter-over-quarter to €1,230 million, resulting in an NPL ratio of 2.6% with coverage at 70%. Similarly, non-performing assets (NPAs) declined by 7% from the previous quarter, with the gross NPA ratio at 4.3% and the net NPA ratio at 1.2%.

The following chart illustrates the bank’s progress in reducing non-performing loans:

On the capital front, Unicaja maintained a strong position with its CET1 fully-loaded ratio improving to 15.4%, an increase of 27 basis points compared to the fourth quarter of 2024. This capital strength provides the bank with significant flexibility for growth and shareholder returns.

The CET1 capital evolution demonstrates the bank’s organic capital generation:

The bank’s liquidity position also remained robust, with a loan-to-deposit ratio of 69%, a net stable funding ratio (NSFR) of 162%, and a liquidity coverage ratio (LCR) of 270%, all well above regulatory requirements.

Business Activity and Growth Areas

Unicaja reported strong momentum in lending activity, with new private sector lending increasing by 44% year-over-year to €2,250 million in Q1 2025. Business and self-employed lending grew by 49%, mortgages by 37%, and consumer lending by 33% compared to the same period last year.

The bank’s wealth management and insurance business showed particularly strong performance, with assets under management reaching €23.4 billion, up 9% year-over-year. Mutual funds saw significant net inflows of €958 million during the quarter, representing a 9% market share.

The bank’s profitability metrics reflect these positive business trends:

Outlook and Guidance

Looking ahead, Unicaja provided guidance for 2025, targeting net interest income above €1,400 million, flat fees, cost growth of approximately 5%, a cost of risk around 30 basis points, business volume growth of approximately 3%, and a ROTE of 12.5%.

The bank’s final remarks highlighted its focus on scaling up structural profitability, continuous improvement in asset quality, maintaining a high solvency position, and substantial improvement in shareholder remuneration with a 60% payout ratio.

As shown in the bank’s summary of key achievements and outlook:

The detailed guidance for 2025 provides a roadmap for the bank’s performance targets:

Unicaja Banco shares closed at €1.678 on April 25, 2025, representing a 1.15% increase on the day. The stock has traded between €1.049 and €1.818 over the past 52 weeks, according to market data.

Full presentation:

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