January 23, 2020 / 9:08 AM / a month ago

UPDATE 1-Spain's Bankinter Q4 profit down 13% on costs, NII up

* Q4 net profit down 13% y/y, beats analyst forecasts

* Q4 net interest margin up 13% y/y

* FY net profit up 5% as new deals support business

* Shares up (Adds detail)

By Jesús Aguado

MADRID, Jan 23 (Reuters) - Bankinter posted a 13% decline in fourth quarter net profit reflecting an increase in operating costs related to acquisitions, Spain’s fourth biggest bank by market value said on Thursday.

Despite the costs in the fourth quarter, the bank’s net profit for the entire 2019 increased 5% to a record of 551 million euros as the deals have started to boost the bank’s margins.

Bankinter posted a profit of 106 million euros ($118 million) for the October to December quarter, slightly better than the 102 million expected by analysts in a Reuters poll, but down 13% from a year earlier.

Its bottom line was hit by an increase of 12.8% in operating expenses in the fourth quarter to 284 million euros in part related to its acquisition of EVO and AvantCard, which have been included in the bank’s accounts since the end of May.

The bottom line was also hit by a 47 million euro charge to the national deposit guarantee fund. Net interest income (NII), a measure of earnings on loans minus deposit costs, rose 13% to 315 million euros in the fourth quarter.

Shares in Bankinter led gains on Spain’s blue chip index Ibex-35 with an increase of 1.6% as analysts welcomed an rise in volumes on a positive performance in fees.

Spanish lenders are shifting their focus from a mostly mortgage loan book to a more profitable business related to fees income such as asset management.

Bankinter, which is one of the most profitable lenders in Spain with a return on equity (ROE) of 13% as of end-December, is in the process of spinning off and listing more than 80% of its insurance business Linea Directa Aseguradora (LDA).

The bank expects to list LDA, which accounts for around a fifth of its profit and revenue, in the second half of this year.

($1 = 0.9311 euros)

Reporting by Jesús Aguado; editing by Inti Landauro and Katya Golubkova

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