Earnings call transcript: Bankinter Q3 2025 reports 11% profit growth

Bankinter reported its third-quarter 2025 earnings, showcasing a strong financial performance with an 11% year-on-year increase in net profit, reaching 812 million euros. The company, currently valued at $271.82 million, maintains an impressive dividend yield of 9.48% and has maintained dividend payments for 41 consecutive years, according to InvestingPro data. Despite a slight quarterly improvement in net interest income, the company’s stock experienced a 4.18% decline, closing at 12.77 euros, amid a broader market reaction.

Key Takeaways

• Bankinter’s net profit grew by 11% year-on-year to 812 million euros.
• Core revenues reached a record 762 million euros.
• Stock price dropped by 4.18% following the earnings announcement.
• The company maintained a high Return on Tangible Equity above 19%.
• Digital transformation and AI investments continue to be a focus.

Company Performance

Bankinter demonstrated robust financial health in the third quarter of 2025, with net profit rising 11% compared to the same period last year. The bank’s core revenues hit a record high of 762 million euros, underscoring its strong operational performance. Trading at a P/E ratio of 13.81 and showing defensive characteristics with a beta of 0.47, the company’s efficiency remains a standout, with a cost-to-income ratio of 36%, positioning it as a market leader in efficiency. For deeper insights into Bankinter’s valuation and 8 additional key ProTips, visit InvestingPro.

Financial Highlights

• Net profit: 812 million euros, up 11% year-on-year.
• Core revenues: 762 million euros, the highest in the company’s history.
• Return on Tangible Equity: Above 19%.
• Cost-to-income ratio: 36%.

Market Reaction

Following the earnings release, Bankinter’s stock price decreased by 4.18%, closing at 12.77 euros. This movement positions the stock closer to its 52-week low of 7.226 euros, reflecting investor concerns despite the positive earnings report. InvestingPro analysis reveals the stock is trading at a high P/E ratio relative to near-term earnings growth, which may explain some investor hesitation. The decline in stock price could be attributed to broader market trends or specific investor sentiment towards the banking sector.

Outlook & Guidance

Looking forward, Bankinter anticipates mid-single-digit growth in loan volumes and aims for a client margin of 2.70%. The company expects double-digit growth in fees and targets cost growth at mid-single digits. Despite a stable net interest income, a slight decline is anticipated.

Executive Commentary

CEO Gloria Ortiz emphasized the company’s resilience, stating, "We continue to navigate an uncertain and volatile environment." She further highlighted the pillars of Bankinter’s business model: "Diversified growth, asset quality, and efficiency." CFO Hakobo Dieff expressed optimism about the upcoming quarter, adding, "We are optimistic about the fourth quarter of this year."

Risks and Challenges

• Economic uncertainty and market volatility could impact future earnings.
• Competition in the mortgage market remains intense.
• The potential decline in net interest income could affect profitability.
• Macroeconomic pressures in key markets like Spain and Portugal.
• Regulatory changes and compliance costs.

Q&A

During the earnings call, analysts inquired about Bankinter’s digital account strategy and its competitive stance in the mortgage market. Discussions also covered the bank’s international lending growth and capital deployment strategy, highlighting its ambitions in wealth management.

Full transcript - Bankinter (BKT) Q3 2025:

Lori, Moderator/Operator, Banquinter: Good morning to all and thank you for joining this earnings call for the 2025. Financial statements were posted with market authorities earlier this morning and all materials can be found on our corporate website. Please refer to the disclaimer in this presentation and note that this call is being recorded. Today, we are joined by our Chief Executive Officer, Gloria Ortiz and Chief Financial Officer, Hakobo Dieff.

Gloria Ortiz, Chief Executive Officer, Banquinter: Thank you, Lori. Good morning to all, and welcome to this third quarter twenty twenty five results presentation. Since we last met in July, many things have happened. The tariff conflict between the European Union and The United States has been resolved. The Israel Gaza conflict seems for now to have reached its end.

We learned the results of the BBVA Sabadell takeover bid last Thursday, and interest rates have bottomed as the European Central Bank has ended rate cuts with inflation aligned with its targets. Additionally, the EBA stress tests were published on August 1, in which Banquinter is again the listed bank in Spain as well as in the Eurozone with the lowest capital depletion in the hypothetical case of a very adverse economic scenario. We continue to navigate an uncertain and volatile environment. And despite this, I would like to highlight that this quarter’s results remain satisfactory following the trend of the previous quarter with very relevant growth and activity across all business and geographies. The third quarter has been another quarter with strong commercial activity translating into a post tax result of EUR $812,000,000, 11% above the same period last year.

These results are also accompanied by solid management ratios in terms of asset quality, efficiency, profitability and solvency. As reflected in the figures, we continue to report improving results in which, as usual, balanced and diversified growth is key. Credit and loans as well as retail deposits grew 5% with off balance sheet balances up 20% year on year. Net interest income has continued to improve in the quarter. In the second quarter, we reported a contraction of 5% that has been reduced to 3.5% in September.

In fact, in quarterly terms, it is the second quarter that we have grown over the previous quarter, reaching levels of the 2024. This is thanks to the resilience of customer margin, which remains at 2.7% this year. On the other hand, fees and commissions continue to perform exceptionally well, maintaining a growth rate of 10.6% despite the fact that each quarter, the comparison with the previous year is more demanding. All this growth has been achieved while keeping our risk appetite intact, which is reflected in the NPL ratio that stands at 2.05%, improving previous quarter ratio as well as the one reported twelve months ago, which was 17 basis points higher. Another key to our business model is efficiency, which stands at 36%, the best cost to income ratio in the sector.

Diversified growth, asset quality and efficiency are the pillars on which the profitability of our business is based, maintaining a ROTE above 19%. As a result of intense commercial activity, we once again present strong diversified growth in business volumes this period. If we add credit and loans, retail deposits and off balance sheet volumes, the volumes managed amount to $234,000,000,000 at the September and grew by EUR 19,000,000,000 year on year. This is a remarkable growth rate of 9%. Going into detail.

Lending reached EUR 83,000,000,000 at the end of the quarter, which is EUR 5,000,000,000 more than in September 2024. Retail deposits closed the quarter at EUR 85,000,000,000, a figure EUR4 billion higher than in the same period of the previous year. And finally, we added EUR11 billion to the off balance sheet business, which stands at EUR66 billion, showing a strong growth of 20% year on year. This year, we have seen a noticeable increase in new client acquisition, particularly through our digital channels. The integration of talent and technology from Evobanco over the summer has assisted to further strengthen our digital strategy for the group.

All geographies are growing at good pace. Spain, which accounts to 87% of business volumes, grows 7%, while Portugal with 11% contribution to volumes grows by 12% and Ireland also stands out with 20% growth. New credit production also continues with improving trends as a result of the increased commercial activity. 16% in new mortgages, 6% growth in new business lending and a 3% drop in consumer credit due to the fact that we continue to reduce exposure to riskier segments. On Page seven.

For the past twelve months, we have seen increasingly positive trends in sector growth across the geographies in which we operate, with close to a 3% market growth in Spain, 7% in Portugal and two percent in Ireland. In each of these markets, we continue to gain market share in each of our business lines. In our core markets, Spain, the retail banking loan book increased by 3.4%, 30 bps above the market, and our Business Banking book outperformed by 180 bps, reaching a 4.3% growth rate. With Baobanquinto Portugal and Ireland in expansion, we continue to gain significant market share, further diversifying our asset portfolio. Portugal grew 11%, four fifty bps above the sector and Ireland, an exceptional 20% growth rate, well above market growth rates in both countries.

In terms of revenues, there is a very notable performance of core revenues. This is the sum of net interest income and net fees and commissions, which has reached similar levels to those in the previous year. In quarterly terms, core revenues reached EUR $762,000,000, the largest in the series. And in fact, they are already growing both previous quarter by 1.3% and compared to the same quarter of 2024 by 2%. This sustained solid performance quarter after quarter of fees and commissions growing at 10.6%, compensates for over 90% of net interest income compression in the year due to the negative impact from the reduction of yield curves.

Net interest income fell on a cumulative basis 3.5%, but in quarterly terms, the upward trend continues. We are already 3% above the last quarter of the previous year and 5% more than in the first quarter, and we also grew 1% over the previous quarter. Going now to the next page. I would like to talk about productivity. We have a scalable and efficient business that is reflected in productivity improvements.

The volume of customers managed per employee expands year after year, while the

Speaker 2: cost per million euros of volumes managed decreases year on year. This is thanks to the investments made in technology and, in particular, in artificial intelligence projects that are oriented to the improvement of personal activity, commercial efficiency, which relies mainly on algorithms, but also process efficiency

Gloria Ortiz, Chief Executive Officer, Banquinter: and the improvement of the customer experience and the development also of new products. Bankinter culture of applying targeted innovation across products, services and processes continues to deliver measurable results, reinforcing our strategic positioning and driving ongoing improvements in operational scalability. I will now hand over to Hakobo, who will provide you with more additional detail and insights into our financial and commercial results.

Hakobo Dieff, Chief Financial Officer, Banquinter: Thank you very much, Gloria. Good morning, everybody. We are pleased to share once again another quarter growth and increased revenues and profitability. In operating income, we have grown by 4.7%, thanks to increased volumes, continued strong fee growth and effective margin management. We continue to rebalance operating costs more evenly over quarters with a year on year increase declining each quarter to end the year within our guidance.

Cost of risk and related provisions declined by 10% compared to the prior year, reflecting a continued positive trend in risk management. Net profit rose 11% to €812,000,000 gaining momentum to well surpass our initial goal of €1,000,000,000 in 2025. Let’s move on to review additional details about each line in the following slides. So after the trough in the first quarter of this year, we continued to deliver quarter on quarter improvements in net interest income, now recovering levels of the third quarter of last year reporting five sixty six million euros a 1% increase quarter on quarter. Asset yields continued to contract this quarter at 3.49%, down 22 basis points.

This quarter reflects a typical low seasonality period where corporate banking activity is relatively lower compared to retail banking activity, which has influenced a bit of a mix change leading to a higher weight of repricing more in line with retail durations than the shorter corporate durations. Given these dynamics and a stable outlook for Euribor twelve months rates, we believe average quarterly asset yields should drop marginally in Q4 to reach stability in the 2026. Average customer margin for the year remained resilient at our two seventy basis points, continuing to demonstrate our ability to effectively manage margins. With cost of deposits now at 84 basis points, a material 14 basis points decrease from last quarter, we are optimistic to reach levels around 75 basis points by the end of the year. Our NIM also remains resilient, a direct result of the effective balance sheet management.

After sharing the details of the NII results, we wanted to talk about the excellent results we have been seeing quarter on quarter related to our digital account strategy that we initiated last year as part of the new digital organization. These growing digital site account deposits, in yellow in the graph on the left, have aided in reducing and replacing typical long term deposits with more granular and flexible shorter duration deposits. Between both digital site accounts and private banking or corporate treasury accounts, we now have a significant proportion of our deposits with less than a three month duration. This is less than half of the average duration of the term deposits. Not only does this provide us greater agility to adjust deposit rates in line with market rates, but it also has a great source of increased customer activity, either transactional or through AUMs activity, driving additional fee volumes with a scalable operational model at a marginal lower servicing cost base.

As you can see on the chart on the right, we have increased our average deposit spread over the past four quarters, reaching now close to 130 basis points. We believe these deposit spreads levels are likely to remain quite resilient, possibly with some upside for the coming years given the favorable rate environment as well as a more flexible deposit structure and our deposit gathering capability from our excellent existing and new customer base. Bear in mind that 50% of new customers are acquired through our 100% digital channels. Fees continue to deliver sequential increases quarter on quarter even during the seasonally low summer months, with an increase of 11% on a year on year basis, reaching €196,000,000 this quarter, up 2% on a quarter on quarter basis. This continued quarterly growth momentum is mainly attributable to the strong volume growth in fund management and brokerage services that we detail later in the presentation.

We are quite optimistic to continue to maintain this growth momentum going forward given our strong focus and strategy on affluent customer base and increasing flows from on balance to off balance sheet activity and customer centric operating model. It is also quite remarkable the performance of these business lines delivering improved results, notably in the equity method and dividend lines, up 29% on a year on year basis. The diversification of sources of revenue is well represented here given our diversified business investment over the past years in areas like our insurance JV partnership, our JV in Portugal with Sonae to deliver consumer finance products as well as our successful strategy with the Banquintra investment franchise, delivering alternative investment vehicles, allowing our customers to invest in real assets. This business line will continue to develop and deliver increased results over the coming years, providing upside risk in nontraditional revenue lines. Regarding cost, we continue to reduce seasonality and balance our expenses over the year, increasing 3% when comparing average ’25 quarterly costs to those in 2024.

Although cost volumes may increase in Q4, they will be lower on a year on year basis when comparing to 2024. Cost to income ratio remains at an exceptionally low level of 36% and will remain committed to maintaining positive operating jobs in the future. On Page 17, loan loss provisions continue to show improvements versus last year with a cost of risk of 33 basis points. Other provisions also remain under control and performing well at a stable eight basis points. With no signs of deterioration in the market of our portfolio and with a well managed risk management across the bank, we are optimistic to maintain current levels for the coming quarters.

Next page. Net profit achieved record levels once again, reaching €812,000,000 an exceptional increase of 11% year to date. Credit quality. Credit and asset quality indicators continue to improve with the group NPL ratio dropping to 2.05, down 17 basis points from last year Spain down to 2.3, Portugal at 1.4 and Ireland at 0.3, all well below sector average. Moving into capital.

As Gloria mentioned, we are very pleased with our EBA stress test results this quarter, resulting once again in the lowest level of capital depletion among all Spanish and Eurozone listed bank. Even under a severe economic adverse scenario, the potential capital depletion would only be 55 basis points. The prudent risk profile of our activity is differential. This has been a strong quarter for capital generation with the CET1 ratio at 12.94%, with a seasonal mix shift from corporate lending to increased retail lending, therefore, RWA growth this quarter, which we view with the reverse in the following quarter with larger loan growth and density consumption and the annual operational risk capital consumption recorded in the fourth quarter. As we continue to invest in technology and strategic projects, we have also seen an increase in intangibles this quarter due to the software based solution under deployment, for example, with the new banking IT platform for Ireland or the Portuguese digital transformation program.

Moving into Page 22. Commercial activity and trends remain strong with customer volumes up 7% in Spain, 12% in Portugal and 20% in Ireland, each region contributing at increased levels to the gross operating income of the bank. On Page 23, loan growth, again strong, up 4% year on year, growing both in retail as well as business lending. Retail deposits continued to demonstrate solid growth, increasing by 4% with also strong performance in wealth management, reflecting a nineteen percent increase in assets under management, contributing to fee income increases of 11%. Profit before tax up 6% reflecting solid contribution for our core Spanish business.

On Portugal, continued exceptional performance in lending activity across both business segments up 11%, strong deposit gathering, up 5% as well as increased wealth management and brokerage balances rising 23% on a year on year basis. Moving into Ireland. Commercial momentum continues with mortgage loan growth, up 23% as well as consumer finance loan growth by 11%. We have also launched our fully digital time deposit in the average market with an attractive value proposition that will surely grow deposit volumes over the coming quarters. Profit before tax contribution reached €34,000,000 with strong sequential increases in NII each quarter, up 16%.

Moving into Corporate and SME Banking. Business lending continued to deliver a strong performance even with a seasonally low quarter in terms of new loans. Customer lending increased by 5%, well above sector loan growth. International business segment continues to be a key growth catalyst, contributing to onethree of new credit production with a growth rate at 9% year on year. Page 27.

Retail banking asset and deposit trends remained strong with increased new client acquisition driving core salary account balances up by 7%. New mortgage origination, up 16% year on year with solid market share of new production in Portugal, Spain and Ireland at 6%. Our mortgage back book continues to grow by a strong 5% year on year, outperforming sector growth in every region. Regarding wealth management, our high quality customer base typically brings annual net inflows between 5,000,000,000 to €7,000,000,000 into the bank. However, this year, we have already surpassed this historical range and now reset our ambition to achieve between 8,000,000,000 to 10,000,000,000 of net new money every year.

When taking into consideration the market effect as well, incremental wealth of our customers increased by €20,000,000 or a 16% increase on a year on year basis. Moving into off balance sheet volumes. We continue to grow in assets under management and assets under custody, reaching now €150,000,000,000 with assets under management, advisory or customer direct execution services in brokerage. Since our differentiation strategy centers around the client and how they prefer to interact with the bank rather than a product strategy, we indistinctively offer banking through products as well as third party products to retain independence in terms of customer advisory services. With a full range of products as well as various servicing models based on customers’ preference, we are able to consistently grow these off balance sheet volumes, a key driver of continued fee growth quarter after quarter.

And finally, let me recap our ambitions and targets. Given our solid third quarter financial results, a strong commercial momentum and volume growth trends and with a stable outlook for Urivar twelve months over the coming year around 220%, we remain optimistic in terms of future growth potential. In terms of our specific ambitions for this current year, loan volumes are expected to continue to grow at mid single digit rate, similar than deposits, with assets under management’s commercial activity following the same strong performance than previous quarters. As market conditions become more favorable, we are committed to maintaining twenty twenty five average customer margins around two seventy basis points to support robust profitability that surpasses our cost of capital. In essence, we will not compromise margin integrity.

Regarding NII, we anticipate that the final phase of retail repricing will take place mostly in Q4 and with much lower impact in the 2026. Consequently, while some pressure on asset yields is expected to persist, it should moderate as our corporate portfolio has now been fully repriced in Q3. On the deposit side, we will continue to reduce and manage costs in a balanced manner to support ongoing customer and deposit growth, particularly in the digital side accounts. As a result, we expect a more modest reduction in deposit costs in Q4 compared to Q3 between the range of five to 10 basis points. Given these dynamics and our current commercial strategy, NII in Q4 will keep growing quarter on quarter again and growing year on year again, which may result anyway in a slight slippage in our flattish NII guidance in 2025 that will be compensated by a stronger fee growth.

With upside risk in fees, we increased our targets of high single digit growth target to reach now double digit growth in fees. With respect to cost management, we continue to allocate and balance cost volumes over the quarters and remain on target for 2025 full year annual cost to grow mid single digit. We also remain committed to delivering positive operating jaws in 2025, gross revenues above cost. As credit quality continues to improve, we are revising our targets with the expectation of cost of risk to fall below 35 basis points for the entire year. Although we do not provide guidance for the following year until the results presentation in January, we must say that as of today, with the current macro outlook for Spain, Portugal and Ireland, there is no reason why we should not expect similar levels of growth in our loan book as well as resilient client margin in our levels of cost of risk.

Efficiency will also remain at the top of our agenda to ensure sustainable levels of return on equity in 2026 and so on. And capital levels are expected to stay strong in coming quarters despite profitable growth expectation. I believe that this has been another high quality set of results with no surprises, one offs or extraordinary items, quite predictable, that make us feel to be on track to achieve another excellent year in 2026. Gloria, back to you for any closing comments.

Gloria Ortiz, Chief Executive Officer, Banquinter: Thank you, Jacobo. Well, as you can see, the results of these first nine months of the year have once again beaten records of previous years with an 11% growth in net profit, and all this is accompanied by an excellent level of operational efficiency and asset quality, both ratios improving compared to the previous year. All this allows us to continue improving returns on capital, which stands at 18.2%, 30 bps better than in 2024, and continues generating value for our shareholders both in terms of dividend distribution and the book value of shares. To close the presentation of results for this first nine months of the year, I would like to highlight that we are once again presenting solid results because of the recurring activity with our customers and the execution of a consistent long term growth strategy. We are growing steadily in all the businesses and geographies in which we operate, keeping our risk appetite intact, even improving the risk profile of the loan portfolio as reflected in the NPL ratio and the increase in the coverage of the nonperforming loan portfolio.

We continue to invest in projects and initiatives that allow us to keep pace with business growth. And despite these, we improved efficiency. All these results delivering a sustained return on the capital of the business, well above the cost of capital. For my part, this is all. Thank you again very much for your attention, and I will pass now on to Lori.

Lori, Moderator/Operator, Banquinter: Thank you very much, Gloria. Thank you, Hakobo. Let’s now move on to the live Q and A session, please. Our first caller is Francisco Riquel from Alantra. Francisco, please go ahead.

Francisco Riquel, Analyst, Alantra: Yes. Good morning. Thank you for the presentation and taking my questions. My first question is about the fast growth in digital accounts. It’s four times bigger year on year.

So I wonder if you can comment on the cost of these digital accounts compared to your total cost of deposits and the alternative of time deposits where you are switching. And I wonder if you can also elaborate on the commercial experience with these online customers and cross selling ratios as you are not exceeding your traditional mid single digit growth in loans and deposits. You are growing faster in AUMs, but I wonder if this is coming from these online clients or from your traditional affluent and high net worth clients? And then my second question is about loan growth in Spain, which has slowed down year on year a bit, particularly in higher margin corporates from 6% in Q2 to 4% in Q3. The sector has not.

They’re still growing by 3% in lower margin retail mortgages. So I wonder if you can comment on the on competition dynamics and update in terms of loan growth and also in the loan yield, where do you see the trough of this interest rate cycle? You.

Hakobo Dieff, Chief Financial Officer, Banquinter: Good morning, Pavel. Regarding the loan growth, I think we had another, I think, good quarter comparing year on year in terms of the loan book. As I mentioned, the seasonality of the third quarter is I mean, typical in Spain, it has a negative seasonality. And the corporate banking activity has been lower as we normally expect. So we do not have any sign of slowing down in that perspective.

It’s just a matter of seasonality. In fact, we keep expecting similar levels of growth at the end of the year compared to, I don’t know, previous quarters. Basically, we do not expect any changes. You mentioned competition. Of course, there is competition in the Corporate Banking as well in the mortgage activity, but this has been always the case.

So there’s nothing special to highlight. I would say that loan growth will continue to show strong results. And regarding the digital accounts, definitely, digital accounts have been quite a relevant strategic commercial move for us in the past months and quarters. So we are delivering excellent results. We are capturing quite large volumes of deposits.

We are cross selling, of course, as you can imagine, plenty of different types of products. I wouldn’t say that the largest volumes of AUMs are coming from the new digital accounts because it takes some time to transform and to cross sell these type of accounts. But definitely, we are quite happy. You were mentioning about the cost. The thing is that these digital accounts have a quite short duration.

And for us, is we have the agility and the capacity to change prices within a quarter. So for us, from a commercial strategy, we are quite happy.

Gloria Ortiz, Chief Executive Officer, Banquinter: I will add two things. I mean the average cost of the digital accounts at present is around 1.6%. Actually, as Jacobo has said, the duration is around two months. So and we manage centrally, which is different to when it’s products that are managed by the branch network. We manage centrally new prices.

So it is quite easy and fast to reduce the cost. But on top of this, what I want to mention is that what we have been doing is a substitution effect. So basically, these deposits have been substituting higher tickets from enterprises and corporates. And there has been a reduction in the cost because we have been substituting higher costier deposits. As Hago has said, I mean, looking forward, we expect the cost of funds to the retail funds to continue reducing next quarter sorry, this quarter and in the order of five to 10 bps depending on where the Euribor stands.

With respect to competition here, yes, we have been growing quite nicely in mortgages in Spain so far. But I have to say that the competition is starting to be a little bit irrational, particularly in fixed rate mortgages of long term, like thirty years. So you can expect us to be a little bit less active in that segment, although we think that we will continue to grow.

Lori, Moderator/Operator, Banquinter: Thank you. Let’s move on to our next question. Our next question comes from Borja Ramirez from Citi. Borja, please go ahead.

Borja Ramirez, Analyst, Citi: Hello, good morning. Thank you very much for taking my questions. I have two. Firstly, is on the NII. If I were to base the Q4 NII of this year and multiply by four and add the loan growth, would this make sense from a technical point of view to for estimating the 2036 NII?

Or would there be any other moving parts? And then my second question would be in Ireland. I think you according to press, you launched a deposit of 2.6% rate, if I am correct. I would like to ask if you could provide some details on the growth strategy in Ireland in deposits. Thank you.

Gloria Ortiz, Chief Executive Officer, Banquinter: Hello, Borja. Regarding Ireland, I mean, what we are doing is just a test for the moment. So it’s our friends and family. We are offering these deposits only to our clients and only a certain amount. I mean, initially, we are talking about EUR 50,000,000.

So this is like a welcome deposit, and it’s not going to have any impact at all in this year NII, and I don’t think in next year either because we are controlling, as you can imagine, the growth in these deposits. With regard to NII, I’m multiplying by four. Well, it’s a little simplistic. It could be near if your LIBOR rates stay completely stable around the year. It will be probably better than that, than the MER multiplication by four.

Hakobo Dieff, Chief Financial Officer, Banquinter: Yes. I think our assumptions are we keep, as we mentioned, estimating that the average client margin for coming quarters should be around two seventy basis points and that we will continue to grow in similar or at the similar path that we’ve been growing the past quarters. So that will be the main assumptions that you should take into consideration. As Gloria was mentioning, it’s not just multiplying by four. We definitely think it could be a little bit higher than that.

Lori, Moderator/Operator, Banquinter: Thank you. Our next question comes from Nacho Ullardi from BNP Paribas. Nacho, please go ahead.

Speaker 2: Hi, thanks for the presentation and for taking my questions. Just wanted to get a bit of a sense on the capital performance of the quarter. What you just, Jacob, flagged about reverting the effect of the mix in the quarter, in the coming quarters. I mean, still 12.9% looks to me like a very high level. Is there any chance that the bank considers changing the 50% payout ratio with the current trend of capital?

Second one is on costs. You said in the guidance, if I hear correctly, mid single digit growth. Should we expect slightly more acceleration given the good performance of revenues that you front out a bit of cost for 2026 in the fourth quarter beyond the natural seasonality that you have been trying to smooth this year? Or that would be or you’re going to be very focused in keeping the costs on that limit to avoid slippage in 2025? You.

Hakobo Dieff, Chief Financial Officer, Banquinter: Hi, good morning, Natcho. Regarding the capital performance, as I mentioned, we present a quite strong capital ratio this quarter. And I did mention that there is some seasonality impact in this figure. So for the fourth quarter, we do expect a much growth or much larger capital consumption from the growth, especially from the corporate banking activity that tends to be quite strong at the end of the year and, of course, growth in the retail business and in other geographies as we have done. And additionally, I’d mentioned that there are some special recordings in the fourth quarter from capital consumption as the operational risk is fully recorded in the fourth quarter.

So we do expect a figure probably lower than this one that we have shared today with you, although the results for the fourth quarter are going to be, again, very, very strong. Do this means are we do we have in mind changing our dividend policy? I would say not for the time being. But of course, if we will see these trends in coming quarters, of course, we might think about doing whatever in terms of keeping our capital ratio in levels where we feel comfortable.

Gloria Ortiz, Chief Executive Officer, Banquinter: Hello, Ignacio. With regard to cost, I mean, we are very comfortable with the low mid single digit growth, and we will stick to this. I mean, we don’t see any reason why we cannot meet our target.

Lori, Moderator/Operator, Banquinter: Our next question comes from Carlos Peixoto from CaixaBank BPI. Carlos, please go ahead.

Carlos Peixoto, Analyst, CaixaBank BPI: Good morning. Karsten Prasot from CaixaBank here. A couple of follow-up questions actually as well. So mostly on NII. So if I understood correctly, you’re expecting to see some pressure on asset yields coming through still in the fourth quarter through the repricing mechanism.

Then you mentioned deposit costs maintaining roughly spreads to to a LIBOR. And and I guess that’s some volume growth, as you as you mentioned, fourth quarter tends to be much stronger. So putting all of this together, did you see enough support for NII in the fourth quarter to do materially better than in the 4Q? And as you mentioned in the call, you now see some well, basically, that you won’t be reaching the stable NII guidance, but I was just wondering whether we could be talking about a small single digit decline in NII or closer to mid single digit? You very much.

Hakobo Dieff, Chief Financial Officer, Banquinter: Morning, Carlos. We did mention that the cost of deposit in the we are expecting next quarter to continue to decline probably at a lower speed than we saw in previous quarter. And we mentioned somewhere between five to 10 basis points decline in the coming quarter. But we also we mentioned that we are we have come to a much lower speed of loan yield repricing, and we do expect some sort of stabilization or a slight reduction in the fourth quarter. That will mean that we do expect client margin to recover.

And we are quite strong optimistic in terms of we will have a good at the end of the day, a good final quarter. Indeed, like you mentioned that and I did mention, there might be a slight or minimum slippage in the overall flattish guidance. But again, it’s going to be much more than compensated with fees. So we are good I mean, we are quite well optimistic about what’s going happen in the fourth quarter. So there is full repricing in corporate that has already been achieved in the third quarter.

You arrive at twelve months is behaving quite well, around €220,000,000 is a little bit more repricing from the mortgage book in the fourth quarter to come. But again, there is a strong seasonality that we believe will make a good fourth quarter to end up the year. As I mentioned, the fourth quarter is going to be, again, higher than the third quarter and much higher than the same quarter one year ago. So we think we are optimistic about the fourth quarter of this year. And of course, the coming quarters in 2026, we think this two seventy client margin is something that we is definitely our ambition, and we are definitely managing everything in order to achieve that figure.

Lori, Moderator/Operator, Banquinter: Thank you, Hakobo. Our next question comes from Ignacio Ferrezo from UBS. Ignacio, please go ahead.

Ignacio Ferrezo, Analyst, UBS: Good morning. Thank you for taking my questions. I’ve got one on the international credit book, which is around 3035% of the total corporate lending book and seems to be growing much faster basically in domestic. So if you can give us some information, some color basically of what is in there and what is the reason is growing faster and what kind of sustainability you see on that? And kind of related to this more on a system basis from a mortgage growth point of view in Spain, obviously, prices going up very fast.

It doesn’t feel that the shortfall of housing is going to be corrected anytime soon. I mean, is there any risk that the demand actually ends up drying up faster because of, I mean, problems of affordability, I mean, difficulties from people to access housing, etcetera? Do you think actually the pickup of mortgage growth we’re seeing in the last year or so has less? Or there’s a risk actually that drives up into the next, say, six to twelve months? Thank you.

Gloria Ortiz, Chief Executive Officer, Banquinter: Hello, Nacho. With regard mortgages, we don’t see changes in demand in a very in the short term, so this year or next year. It is true that what you’re saying that prices go up and up and that there could start to be, particularly in medium salaries, there could be problems of affordability. There are measures like the ECO lines, where we are being active. Obviously, we have a little bit more than our market share that basically are trying to tackle this problem because they cover up to 100% of the value of the property.

So what we are seeing in mortgages rather is what I’ve mentioned, which is a competition that is not being very reasonable with regard to long term fixed rates. And basically, we are not going to enter that war, particularly in those clients. But well, in our clients, we might do because if we know how profitable their relationship with them is okay, but it won’t be a measure to acquire new clients, definitely. I think that’s for mortgages.

Hakobo Dieff, Chief Financial Officer, Banquinter: I’ll take your question on international credit book. I think basically, corporate banking Spanish clients are much more international than they used to be. They are much more focused on going abroad. And we do provide a quite large menu of products and services with a good technology, etcetera. So we are developing more technology, more, I don’t know, supply chains management products, working capital facilities, endorsements, etcetera.

So since we have increased our range of products and services to these type of clients, then the volume of activity and the loans and our balance sheet items are keep growing and growing. So this is some sort of sustainable. This is something that we do expect to keep growing at the same at similar levels. So no one option here is quite recurring. And this is, for us, a quite relevant source of revenues in terms of NII, in terms of fees, and it’s a quite profitable business.

Lori, Moderator/Operator, Banquinter: Our next question comes from Alvaro Serrano from Morgan Stanley. Alvaro, please go ahead.

Alvaro Serrano, Analyst, Morgan Stanley: Good morning. I just wanted to follow-up on the loan growth. I take the seasonality And one thing, I just wanted to curious, wanted to double click on your comments around derisking in the consumer book being down, I think you said 3% quarter on quarter. Where are you derisking? What kind of product?

What region? And is it a one off thing? And what should we be looking for in Consumer going forward from here in terms of volume growth? And then the second sort of follow-up question to the broader discussion in the call is, how do you think the pricing dynamics in the mortgage, in particular, is going to evolve over the next few quarters? Are you seeing the market being this bad?

If it stays as

Carlos Peixoto, Analyst, CaixaBank BPI: competitive as it

Alvaro Serrano, Analyst, Morgan Stanley: is, what’s the end game for you in the mortgage market in Spain? Thank you.

Gloria Ortiz, Chief Executive Officer, Banquinter: Alvaro, with regard to the portfolios where we are derisking, it is mainly open market consumer credit in Spain. So we are basically reducing our exposure and reducing also the new production and being more selective. Is on one hand. This portfolio anyway is not very significant in our overall book. And we continue to grow consumer credit, but in our own clients in Spain and also in Portugal and in open markets, both in Ireland and in Portugal with Universo, the JV we have with Sonae.

With regard to mortgages, well, for the moment, we are not seeing any changes in the pricing dynamics. But hopefully, we will be getting to prices where we have some margin with respect to the swap curve. But for the moment, that is not the case. That is why I was mentioning that we will probably decelerate growth, not so much in mortgages with our clients, but rather in the acquisition of new clients with mortgages.

Lori, Moderator/Operator, Banquinter: Thank you very much. Our next question comes from Max Mission from JB Capital. Max, please go ahead.

Max Mission, Analyst, JB Capital: Hi, good morning. Thanks very much

Carlos Peixoto, Analyst, CaixaBank BPI: for the presentation and taking our questions. Two questions from me, please. The first one is on your wealth management business. Press reported several hiring you did. What kind of AUM growth should you think of for banking during the medium term?

And does this mean that fees are also likely to grow above the mid single digits we have seen historically? And the second question is on capital. A follow-up on what the comfortable level is for you. And if the growth is not there, how can we think of deploying this capital?

Hakobo Dieff, Chief Financial Officer, Banquinter: Max, I mean definitely, the current levels of growth in the Wealth Management business is something that we believe are sustainable. Of course, there are market effects that are not controlled, and this is something we cannot control, need or estimate. But the capacity to keep bringing net new money to the bank, as we’ve mentioned in the call, is becoming higher and higher. So now our estimation has increased from our 5,000,000,000 to 7,000,000,000 every year to EUR 8,000,000,000 to 10,000,000,000 every year. And that, of course, means that has an impact on fees.

So definitely, we don’t know exactly what is going to be the level of fees in the recurring level of fees in the future, but we definitely think it’s going to be quite strong and probably stronger that your I think you mentioned mid single digit. So for us, again, the combination of our strategy in commercial activity has a full link in the wealth management activity and, of course, in fees. So

Gloria Ortiz, Chief Executive Officer, Banquinter: with respect to capital, I mean, we feel comfortable with a level in the between $1,240,000,012 60,000,000 something that can give us room to continue growing and that doesn’t restrict that growth. So this is more or less the average level where we are comfortable.

Lori, Moderator/Operator, Banquinter: Our next question comes from Pablo de la Torre from RBC Capital Markets. Pablo, please go ahead.

Gloria Ortiz, Chief Executive Officer, Banquinter0: Just a follow-up on Ireland. On previous comments from Jacobo, you’ve mentioned the fixed term deposit proposition in the country. But can you please remind us on the broader ambition? And what are the next steps in the product road map in the country? And I guess, in particular, you mentioned today your new higher ambition around net new money growth.

So I was wondering if you were planning to start offering wealth products in Ireland next year. Maybe if I can squeeze in another follow-up on capital. Given your excess capital position and given also current valuation levels, can you just kind of update us on your appetite for inorganic growth from now?

Hakobo Dieff, Chief Financial Officer, Banquinter: Pablo, regarding Ireland, definitely, the first phase is through the launch of the term deposit that we’ve mentioned before. Our next ambition is going to be the launch of current accounts at the 2026. And I think this is going to be the great moment of funding the growth that we are expecting in Ireland with deposits from locals in Ireland. So we are targeting to fund whatever growth we have in the loan book in Ireland with the deposit book in Ireland as well. So this is the ambition, and this is the next step.

We are not considering for the time being to move into the wealth management business in Ireland. I think we have plenty of things to capture and to target before that business.

Gloria Ortiz, Chief Executive Officer, Banquinter: And with respect to inorganic growth, well, our appetite is very, very low. As you can imagine, we are an organic grower. We have always grown organically in the different businesses and geographies where we have the capabilities, and this is what we are doing in Ireland, and this is what we will continue to do in the future.

Lori, Moderator/Operator, Banquinter: Thank you. Our next question comes from Britta Schmidt from Autonomous. Britta, please go ahead.

Gloria Ortiz, Chief Executive Officer, Banquinter1: Yes, good morning. Thank you for taking my questions. I have a follow-up on the exposure, the open market consumer exposure in Spain that you talked about. Could you share with us the volume of that book and what the driver was for the de risking? I mean, have you seen a material change in the cost of risk there?

And if so, why? And then on the you mentioned the operational risk impact in Q4. I mean, would it be reasonable to assume that it could be up to 20 basis points? Or do you expect something less than that? Thank you.

Gloria Ortiz, Chief Executive Officer, Banquinter: I will I will answer the consumer credit exposure. This is a very small book. It’s like around $11,300,000,000.0. Not all of it is being the risk the risk in in, you know, derisking. The reason mainly here is not the cost of risk, it’s an ROE question.

So basically, we think there are better businesses where we can allocate our capital. And this is why we have decided to reduce our exposure in this book.

Hakobo Dieff, Chief Financial Officer, Banquinter: Britta, regarding the operational risk, of course, we don’t know the figure right now. As you know, the rules have also changed with Basel IV. So it’s probably a little bit ambition for me to give you a good estimation. But it could be somewhere between 1030%. So probably your 20% might be in the middle.

Lori, Moderator/Operator, Banquinter: Our next question comes from Hugo Cruz from KBW. Hugo, please go ahead.

Max Mission, Analyst, JB Capital: Hello, hi. Thank you for the time. I wanted

Carlos Peixoto, Analyst, CaixaBank BPI: to ask you about fee growth, if

Max Mission, Analyst, JB Capital: you could give a bit more guidance. I think before, your guidance didn’t assume any performance fees, which you had a lot of them in Q4. So the new guidance of double digit growth year on year, does that include performance fees as well or not? And the second question on the cost of risk. You’ve improved your guidance a few times this year.

The guidance for this year is below what you did in the previous two years. And then if we have a bit of slowdown in resi mortgages, does that mean the cost of risk next year could be higher than this year? Your thoughts on that would be very helpful.

Hakobo Dieff, Chief Financial Officer, Banquinter: Morning, Hugo. Regarding the fee growth, I think we up as today, we are already at the double digit growth. So just basically, we do expect to continue growing at the similar path that we’ve done in the past quarters. We don’t know yet if there’s going to be any success fee. That’s why we are not included we are not including success fees in those estimations because we honestly, we don’t know it yet.

And regarding cost of risk, I think what we mentioned is that we are expecting to end the year with a cost of risk below 35 basis points. We are currently around 33 basis points, as we shared in the presentation. We don’t think that next year is going to be a higher figure. There is no reason why we should say that because what we’re seeing is that there is quite stable situation. So we are very comfortable with the current situation of cost and risk.

We are not perceiving any changes in the levels of delinquency, etcetera. And in fact, as Gloria was mentioning, we are reducing the exposure to some businesses with higher level of risk. So for next year, we do not expect an increase in the estimation of cost of risk.

Lori, Moderator/Operator, Banquinter: Thank you. Our next question comes from Fernando Gil de Santivanes from Intensa. Fernando, please go ahead.

Carlos Peixoto, Analyst, CaixaBank BPI: Hello. Thank you for taking my questions. Two quick follow ups, please. Regarding fees, I mean, has been one transaction in Q3 regarding the renewables similar to the one you did in the past, but you have not accounted it in Q3. Can you please guide us when this transaction and if there is any potential positive one off coming in Q4?

And is that included in the guidance? This is one. The second one is on costs. In the second quarter, you have the headcount down marginally, but down. Has this anything to do with the growth profile that you have been flagging during this call?

Thank you very much.

Gloria Ortiz, Chief Executive Officer, Banquinter: I will answer the fees. Yes. This quarter, we have made a transaction, the sale of a portfolio of renewables. And we have not accounted for the success fees of this transaction so far because, obviously, the contract has to how to say? We have to close the contract, exactly.

So anyway, the fees that we’re talking about are not material. It will be less than EUR 10,000,000 even a little bit less. So it is not something that is going to move the arrow. With respect to costs and the headcount, we are reducing the headcount We are doing that for several reasons.

The first is that we are investing quite heavily in artificial intelligence, and this is allowing us not to replace the employees that go from the bank either voluntarily mainly. And I remind you that we have absorbed Evobanco this year, and this means that we have 200 more employees in Banquinter Spain, and that was enough to absorb the growth in needed in the headcount for the year. But anyway, I think that with respect to the headcount, you can expect the headcount in Spain to remain very stable next years or even to reduce a little bit because of all these investments we are making in artificial intelligence.

Lori, Moderator/Operator, Banquinter: Thank you. That ends our Q and A session. I would like to thank you on behalf of the entire Banquinter team. And Felipe and I will be there to support you for any questions post the webcast. Thank you all, and have a wonderful day.

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