Q2 net profit rises 61 to 184 mln euros vs forecasts of 191 mln
Q2 NII up 19.6 yy but falls 1.8 qq on higher deposit costs
Ups 2024 NII growth guidance to close to 10 from lowsingle
Performing loan books declines 5.9
Shares down 4 following a 50 rise in the year

MADRID, July 30 Reuters Spanish bank Unicaja on Tuesday raised its forecast for lending income for 2024 after interest rates remained higher than initially expected in the second quarter, though it said margins fell on higher funding costs.

The decline in margins in AprilJune from the previous quarter sent shares in Spain39;s sixthlargest bank by market value down 4 in early trade. Unicaja reported a 61 jump in second quarter net profit, but that was also below market expectations.

Rising interest rates in recent years enabled Spanish banks to charge more for loans while keeping a lid on the rates they pay to savers, but now that interest rates have started to fall banks39; margins are starting to be squeezed.

Central bankers have been warning that deposit costs would gradually pick up and hit margins.

Unicaja39;s net interest income NII, a measure of earnings on loans minus deposit costs, rose 19.6 yearonyear in the second quarter to 383 million euros 414.60 million, in line with analysts39; forecasts.

However, NII fell 1.8 against the previous quarter as customer spreads decreased by 8 basis over the period as deposit costs rose 4 basis points while the yield on loans fell 4 bps.

With interest rates…