Caixabank ups profitability goal after Q3 profit beat, deposit costs rise

MADRID, Oct 30 (Reuters) - Spain's Caixabank raised its profitability target for 2026 after third-quarter net profit beat forecasts on Friday helped by a solid performance at its insurance business and higher lending income that offset higher loan-loss provisions.

Higher interest rates are starting to support margins on loan books, though that is being partially offset by faster repricing in deposits paid out to clients.

• The country's biggest lender by domestic assets reported a 21.7% year-on-year rise in net profit to €1.76 billion ($1.97 billion) in the July-to-September period. Analysts polled by Reuters expected a net profit of €1.63 billion

• Caixabank lifted its 2026 outlook for return on tangible equity (ROTE), a measure of profitability, to around 19% from previously above 18%, after the ratio rose to 18.8% in the third quarter from 18% in the previous quarter

• Insurance revenue rose 11.7% year-on-year in the quarter and fee income increased 7.2%

• Net interest income (NII), a measure of earnings on loans minus deposit costs, rose 4.6% in the quarter from the same period a year ago to €2.8 billion, broadly in line with analysts' forecasts of €2.81 billion. NII was up 2.5% from the previous quarter

• The bank reiterated its 2026 guidance for lending income of above €11 billion, compared to €10.67 billion in 2025

• The cost of deposits rose 9 basis points in the quarter while yields on loans rose 7 bps, narrowing the customer spread by 2 bps to 287 bps

• Loan-loss provisions rose 8.8% from the same quarter last year

• The cost of risk, a gauge of managing potential losses, was 0.24%, unchanged from the previous quarter. Caixabank expects cost of risk below 25 bps by end-2026

($1 = 0.8957 euros)

(Reporting by Jesús Aguado; Editing by David Latona and Joe Bavier)