Bankinter's 58% Q4 net profit rise overshadowed by rise in costs

By Jesús Aguado

MADRID (Reuters) -Spain's Bankinter hit its net profit target in 2022, a year ahead of schedule, powered by higher lending income though higher costs took some of the shine off a strong final quarter.

Spain's fourth largest bank by market value posted a 58% rise in fourth-quarter profit to 130 million euros helped by higher interest rates.

That was slightly below the 132 million euros expected by analysts, however, as provisions rose.

"A strong net interest income result was offset in large part by much higher-than-expected costs which rose 16% quarter on quarter," analysts at brokerage firm Jefferies said.

At 1000 GMT, Bankinter shares were down 2.7%. They rose almost 39% in 2022.

Banks across Europe are beginning to benefit from higher borrowing costs despite economic uncertainty and fears of recession.

In the fourth quarter, Bankinter's cost of risk, the cost of managing credit risks and potential losses, rose to 34 basis points from an annualised 32 points at end-September.

Net interest income rose 47% to 471 million euros, beating the 437 million forecast by analysts.

For the year, NII grew 21% to 1.54 billion euros, topping the 1.5 billion expected by analysts.

Chief Financial Officer Jacobo Diaz told analysts he expected NII to "grow strongly in the first part of 2023" and for the full-year at a similar pace as in 2022.

Net profit for 2022 rose 28% to 560 million euros when stripping out capital gains of 896 million from the listing of its insurance business LDA from 2021.

That beat the 550 million euro target the bank had hoped to achieve by 2023.

($1 = 0.9264 euros)

(Reporting by Jesús Aguado; additional reporting by Emma Pinedo; editing by Inti Landauro and Jason Neely)