Grupo Unicaja recorded a net profit of 573 million euros in 2024, compared to 267 million euros in 2023, an increase of 115%. All income statement margins show double-digit growth and profitability is double that achieved in 2023, allowing for a significant increase in shareholder remuneration. The Board of Directors plans to propose to the General Meeting of Shareholders the distribution of 60% of the net profit for the year, representing 344 million euros in dividends. The dividend per share charged to 2024 would therefore amount to 13.4 cents (2.7 times higher than in 2023), of which 6 cents were already paid in December through the company's first interim dividend.
The Group's results are mainly based on the year-on-year increase in net interest income (13.7%), as well as on the decrease in loan-loss provisions (24.3%), with a good performance of the cost of risk (20 basis points -b.p.- in the fourth quarter and 23 b.p. for the year), and of provisions for real estate and other results, maintaining coverage among the highest in the sector (71.1% in NPAs, 67.9% in non-performing loans and 75.6% in foreclosed assets).
Core income increased by 11.3% due to the aforementioned improvement in net interest income, the stability of net fee income and the containment of operating expenses. The cost-to-income ratio improved by 4 percentage points (p.p.) over the last twelve months to 44.4%.
The commercial dynamics continue to improve. Customer funds showed a favorable evolution. Retail customer funds increased by 2.4% in the fourth quarter of the year and by 5.3% in the last twelve months. Off-balance sheet funds and insurance grew by 7.1% year-on-year to 22,587 million, with a particularly positive increase in mutual funds (18.6% year-on-year and 4.5% in the last three months of the year), with the fourth quarter being the one with the highest volume of net subscriptions since 2021 (648 million euros in the quarter and 1,767 million euros in the year), with a market share, at that date, of 9%, according to Inverco's data.
Non-performing loans and advances to individuals, with a balance of 32,287 million, fell by 0.2% in the fourth quarter and by 2.2% over the year. The balance of performing loans stood at 46,353 million (-1.3% in the quarter), with a significant reduction in the fall of this heading with respect to previous months and a general improvement in formalizations. In 2024, 8,499 million in new loans and credits were granted, of which 2,371 million were mortgages to individuals (27.9% of the total). In the fourth quarter, new mortgages reached 608 million, 43.1% more than in the same period of the previous year, with an annual market share of 4.4% of the national total.
The results obtained have been accompanied by an improvement in the quality of the balance sheet. The volume of non-performing assets (NPAs) continued its downward trend, with a year-on-year fall of 22.1%, due to a 27.8% decline in the stock of foreclosed assets and a 17.6% drop in non-performing loans.
The reduction of NPAs has been accompanied by the reinforcement of the already high levels of coverage, among the highest in the sector, in line with Unicaja's traditional policy of prudence. The coverage ratio of non-performing assets reached 71.1%, that of non-performing loans stood at 67.9% and that of foreclosed assets at 75.6%. The sharp reduction in NPAs and the increase in coverage led to a year-on-year fall, in terms of net NPAs, of 29.2%. The NPL ratio fell to 2.71%.
Unicaja maintains high and solid solvency levels (the highest quality capital, CET 1 fully loaded, stood at 15.1%), with an excess of capital over regulatory requirements of 6.5 p.p. in total capital and 6.9 p.p. in CET1. Liquidity levels remain high, with an LTD ratio of 67% and LCR of 292%.
Balance sheet
Total funds under management grew 3.2% year on year
Funds under management, including wholesale funds, increased by 3.2% year-on-year to 101,951 million euros, characterized by a substantial weight of funds from private individuals, which were very stable and highly granular.
Retail customer funds increased by 2.4% in the fourth quarter of the year, and by 5.3% in the last twelve months, mainly due to off-balance-sheet funds (7.1% year-on-year), including mutual funds (18.6% year-on-year). The accumulated assets of mutual funds amounted to 13,529 million, and those of pension funds to 3,717 million, an increase of 2.9% over the year.
In terms of lending activity, new loan production increased by 21%.
Consumer credit grew strongly, up 4.2% in the fourth quarter and 6.1% year-on-year, driven by the increase in new production (11.5% year-on-year), with a high weight of pre-approved loans and those from digital channels, which accounted for 45% and 39% of the total new loans in the last quarter, respectively.
The outstanding balance of the corporate loan portfolio fell by 4.2% in the fourth quarter, due to seasonally higher early repayments in the last quarter of the year, and by 8.6% in the last twelve months. Sustainable financing to companies increased by 25% year-on-year.
Improved balance sheet quality and high coverage
Unicaja maintains its traditional policy of prudent risk management. At year-end, the NPL ratio fell to 2.7%, and the cost of risk remained at 20 b.p. in the fourth quarter and 23 b.p. for the year. The balance of non-performing loans was 17.6% lower than in December 2023. In this respect, the 25% year-on-year reduction in inflows reflects the bank's credit quality.
Also noteworthy was the good performance of foreclosed real estate asset sales, with positive results. The reduction in the stock of gross foreclosed real estate assets stood at 27.8% year-on-year. Non-performing assets as a whole continued to decline, with a year-on-year reduction of 22.1%.
Unicaja maintains its high coverage levels, among the highest in the sector, standing at 67.9% for non-performing assets and 75.6% for foreclosed assets, with the objective of continuing to accelerate the reduction of this type of assets. Coverage of total NPAs (non-performing and foreclosed) reached 71.1%.
Income statement
Net interest income grew by 13.7%
Net interest income increased year-on-year by 13.7% to 1,538 million euros, with a higher contribution from both the retail and wholesale businesses. Despite the reduction in interest rates in the fourth quarter, net interest income remained stable at over 380 million euros. The commercial or customer spread decreased by 13 b.p. year-on-year to 2.61%.
Net fee income amounted to 512 million euros. It fell by 4% year-on-year, mainly in the collection and payment line, due to the strengthening of customer loyalty to the Fee Free plans, which include improvements in the exemption of commissions for individuals and professionals.
Gross income amounted to 2,041 million, 14.9% more than in December 2023, as a result of the growth in net interest income and the reduction in the item 'Other operating income/expenses' (which includes the temporary tax on credit institutions), based on the fact that no contribution to the Deposit Guarantee Fund (DGF) or to the Single Resolution Fund (SRF) was required this year.
The cost-to-income ratio stood at 44.4%, a year-on-year improvement of 4 p.p. The ROTE profitability ratio improved by 5 p.p. compared to December 2023, to 9.1%.
Pre-provision profit amounted to 1,135 million euros. Loan-loss provisions fell by 24.3%.
Operating income amounted to 831 million euros. Pre-tax profit amounted to 816 million euros, with a net income of 573 million euros, 307 million euros higher than in the same period of the previous year.
Solvency and liquidity
CET 1 fully loaded at 15.1% and solid liquidity position
Unicaja maintains high and solid solvency levels [[1]]. At the end of the year, it reached a level of maximum quality capital phase in (CET 1 Common Equity Tier 1) of 15.1%, a tier 1 capital ratio of 17% and a total capital ratio of 19.1%. These ratios comfortably exceed the required levels of 6.9 p.p. for CET 1 and 6.5 p.p. for total capital.
In fully loaded terms, the bank has a CET 1 level of 15.1%, a tier 1 capital ratio of 17% and a total capital ratio of 19.1%. CET 1 fully loaded increased by 40 b.p. over the last twelve months, thanks to the organic generation of earnings and the reduction in risk-weighted assets.
As a result, the entity has 1,992 million in excess capital over regulatory requirements.
On the other hand, the Texas ratio stood at 26.5%, an improvement of 6.5 p.p. over the last year.
The bank maintains a solid liquidity position, reflected in the Loan to Deposit ratio, which stood at 67.2%, a short-term liquidity ratio (LCR) of 292%, and a net stable funding ratio (NSFR) of 159%.
Strategic Plan 2025-2027
Unicaja has approved a new strategic plan for the period 2025-2027 that aims to consolidate the entity as a universal bank that is close and open to all, driving profitability in a sustained way and building capacities to guarantee a bank of the future with leadership in its home territories.
Among the main strategic ambitions of the Plan is the transformation of retail banking, reinforcing the customer brand experience. In the Business and Corporate area, it aims to grow the business, leveraging mainly on existing customers, improve the customer experience and expand the product portfolio.
To meet these objectives, the bank plans to make an additional investment of nearly 250 million euros in technology and artificial intelligence, a process reengineering to gain in agility and operational excellence and a deployment of measures to enhance talent acquisition and the sense of belonging to Unicaja.
As a result, a significant improvement in results is expected, maintaining the ROCET above 13% in the three years of the Plan, with a net interest income of more than 1,400 million euros in each of the years and an efficiency ratio below 50%.
The improvement in profitability, together with the bank’s comfortable solvency, will allow for an increase in shareholder remuneration, with ordinary dividend expected to reach 60% of net income. In addition, from 2026 onwards, an additional remuneration of over 25% of the accumulated profit for the three years would be added, which would bring the total remuneration for the Plan period to over 85%.
The 2025-2027 Strategic Plan reinforces Unicaja's commitment to ESG, with a cross-cutting project to achieve sustainability objectives and commitment to the environment, society, customers and employees.
Innovation
Unicaja has continued working on its corporate strategy of generative AI, with the aim of launching its Artificial Intelligence Hub with which it expects to develop use cases in this technology. In addition, within the framework of the agreement reached with Bit2Me, it continues to analyze in innovation labs the application of DLT technologies in solutions that implement innovative business models based on tokenized financial products
In 2024, the development and piloting of a conversational banking prototype was completed, allowing a limited number of users to use their own natural language and way of expressing themselves to carry out basic transactions with the bank.
Sustainability
In the area of sustainable and responsible banking, the following actions were carried out in the fourth quarter of the year:
- Verification of the corporate carbon footprint for the years 2022 and 2023 through the accredited entity DNV and registration in the registry of carbon footprint, compensation and carbon dioxide (CO2) absorption projects of the Ministry for Ecological Transition and the Demographic Challenge (MITECO).
- Launch of digital piggy banks and sustainable vehicle financing for companies and the self-employed.
- Implementation of a series of measures to help those affected by the DANA, joining, in addition, to the moratorium provided for in Royal Decree-Law 6/2024.
- In the area of financial education, the Edufinet Project (promoted by Fundación Unicaja and Unicaja) has been awarded in the CECA Awards for Social Work and Financial Education 2023-2024 and has also received the Finance for All 2024 Award of the Financial Education Plan (promoted by the Bank of Spain, the CNMV and the Ministry of Economy, Trade and Enterprise). The 7th Financial Education Congress of the Edufinet Project was also held under the slogan "Financial Education and Cybersecurity: keys for the new digital era", with the support of Funcas Educa, which has exceeded 12,000 views through the web and social media as it was held only online on this occasion due to the weather alert activated by heavy rainfall in Malaga.
[1] Capital ratios include net income, net of accrued dividends, computability pending approval by the European Central Bank.
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