Unicaja expects to sustain a continued advance in its net interest margin in the coming quarters, supported by the improvement in client margin, the "significant" increase in business volumes and the current scenario of elevated interest rates, according to what the financial director of the Andalusian entity, Pablo González, pointed out during the presentation of results to analysts and investors.
Although the bank has postponed the communication of its specific targets for 2027 until the publication of the year-end annual accounts, management has reaffirmed a "quite positive" view of the evolution of income derived from the banking business in the medium term.
González has indicated that the group is favored by a broad base of resources in non-remunerated checking accounts (deposits), whose cost hardly changes with rate movements. At the same time, the entity is replacing fixed-rate loans and debt issuances that are maturing with new credits and investments that already reflect the rates in force in the market.
To cushion possible episodes of volatility in the markets, Unicaja contracted financial hedges (hedges/swaps) in 2023 on most of its balance sheet with a horizon of between two and three years.
As a consequence of this, the bank anticipates an increase in its net interest margin over the next 12 months. After that period, as those hedges expire, the sensitivity of the balance sheet will pick up gradually until it is "slightly above 5% for the following 12 months," according to the executive's estimate.
As for fees, senior management maintains the target of registering low single-digit annual growth. However, González has clarified that the trajectory between quarters will be one of stability or practically flat ('low to flattish'), due to the launch of new commercial loyalty programs.
At the end of the third quarter, net interest income (net interest margin) totaled 1.151 billion euros, 3% more in year-on-year terms, while net fees advanced 1.3%, to 397 million.
"The trend for the coming years will be similar, with an improvement in wealth management commissions ('wealth management'); assets under management, investment funds and insurance will continue to grow at a very good pace, just as has been happening so far, accompanied by a certain stabilization of banking fees going forward," the executive stressed.
Repricing of the loan portfolio
Regarding the evolution of prices in the mortgage business, González avoided offering specific details because of the investigation that the National Commission on Markets and Competition (CNMC) keeps open on the sector, although he did confirm that the general dynamics of margins and the profitability of credit in new operations "have been rising as a consequence of the increase in interest rates".
"As you will understand [addressing the analysts], the sector as a whole is trying to pass on the rise in rates to part of credit operations as far as possible," he emphasized.
Along these lines, the executive insisted that the entity still has broad potential for upward repricing in its loan portfolio. In the case of mortgage loans, the adjustment to the new market rates accumulates between four and five quarters, so the process "has barely just begun".
Regarding deposits, the bank said it feels "comfortable" with their behavior, although it conditioned their future evolution on the savings capacity of families and companies. "The savings rate of the Spanish economy, both companies and households, has stood at around 11%, above its usual trend. Now, it has declined slightly, but we continue to have broad nominal growth in the economy. Therefore, we expect savings to continue growing, especially if we face a more turbulent market environment," he emphasized.
In this framework, the Andalusian entity maintains "the firm conviction" that, in terms of cost of risk, the quality of its loan portfolio is "very solid". After revising the initial forecast downward, it expected to stand between 20 and 25 basis points and, at the end of September, the indicator stood at 0.19%.