By Jesus Aguado

MADRID (Reuters) – Spain’s Caixabank said on Friday its net profit rose 21% in the first quarter from the same period in 2022 thanks to a sharp increase in loan income and strong performance from its insurance business.

The lender reported a net profit of 855 million euros ($943.83 million) in the January-March period despite a cost of 373 million euros from a new bank tax. Analysts polled by Reuters had expected a net profit of 643 million euros.

Spanish lenders including Caixabank, Sabadell, Santander, BBVA have legally challenged the tax.

Despite the economic uncertainty, banks across Europe are benefiting from higher interest rates and Caixabank’s net interest income for the quarter rose 49% year-on-year to €2.16bn, up from €2.02bn. analysts expected.

At the end of March, retail customer deposits at Caixabank fell by 1.4% compared to December after the banking turmoil caused by the bankruptcy of Silicon Valley Bank last month.

($1 = 0.9056 euros)

(Reporting by Jesús Aguado, edited by Inti Landauro)

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