MADRID: Spain’s Caixabank said on Friday its net profit rose 70% in the third quarter from the same period in 2022 as higher interest rates boosted lending income despite a decline of its loan portfolio.

The country’s biggest lender by domestic assets reported a net profit of 1.52 billion euros ($1.61 billion) in the July to September period. Analysts polled by Reuters expected a net profit of 1.38 billion euros.

Spanish banks are mainly retail lenders and are benefiting from higher returns on their loans, which predominantly carry floating rates, while they maintain deposit costs under control.

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The repreciation of their existing loan portfolio is offseting a lower volume of new mortgages.

Against that background, Caixabank’s net interest income, earnings on loans minus deposit costs, rose 71% year-on-year in the quarter to 2.74 billion euros, above the 2.53 billion euros analysts expected.