Bankinter Jumps as Profit Beats Estimates on Better Loan Margins

Bankinter SA jumped the most since July 2013 in Madrid trading after fourth-quarter profit beat analyst estimates as margins on lending improved.

The Spanish bank reported a gain of 76.4 million euros ($83.3 million), compared with 47 million euros a year earlier, as net interest income, or the difference between what banks charge for loans and pay on deposits, grew five percent in the period. Analysts predicted a profit of 70.1 million euros, according to the average of 10 estimates compiled by Bloomberg.

“Results have been very positive, I’ve been gladly surprised,” Nuria Alvarez, a bank analyst at Renta 4 Banco SA in Madrid, said by phone. “After weaker net interest income in the previous quarter, the margins have improved thanks to a drop on the cost of deposits.”

Record-low interest rates and increased competition for loans have put pressure on Spanish banks, squeezing profits. Bankinter shares were up 4.7 percent to 6.13 euros at 10:30 a.m. in Madrid and are down 6.3 percent this year.

The lender this week surpassed Banco Popular Espanol SA as Spain’s sixth-largest bank by market valuation for the first time.

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