Spain's Bankinter, which owns Avant Money in the Republic, has forecast higher lending income and loan growth across its markets as lower provisions meant its fourth-quarter profit fell by less than in previous quarters.
The lender highlighted strength within its Irish business, which offers mortgages, credit cars and home loans from a base in Co Leitrim.
Bankinter’s shares rose by more than 7 per cent on Thursday after it said net interest income (NII), its earnings on loans minus deposit costs, would see low-single digit growth in 2021 despite the impact of negative interest rates in the first half.
Net profit at the bank fell 8.7 per cent to €97 million on extraordinary regulatory charges of €115 million not related to the Covid-19 pandemic. Analysts polled by Reuters had expected a net profit of €73 million.
Bankinter's chief financial officer, Jacobo Diaz, told analysts it expected loan growth on the back of strong activity in mortgage and consumer lending in Spain, Portugal and Ireland.
"Taking into account the context we are in, any positive guidance towards lending income and upbeat comments on overall loan growth are quite outstanding," Nuria Alvarez, analyst at Madrid-based broker Renta 4, said.
Banks across Europe are under growing pressure from rising bad debts and record-low interest rates.
Mr Diaz also said he did not expect additional Covid-19 related provisions and forecast a lower cost of risk for 2021 as economies recovered. – Reuters