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MADRID — Spain’s Unicaja said on Friday it raised its return on tangible equity (ROTE) target for 2024 to more than 8% from an estimated ROTE of 2.5% in 2021 thanks to costs savings and a boost from consumer lending and businesses with stable fees.
The lender calculated the profitability target based on an excess solvency threshold of 12.5% in 2024 after a capital generation of 1.5 billion euros ($1.69 billion).
Under pressure from low interest rates and the fallout from the pandemic, European banks are taking different actions to cut costs, including pursuing mergers, such as Unicaja’s acquisition of Liberbank.
As part of their strategy to offset pressure from low interest rates, they are also pushing for other areas of growth, such as insurance or asset management.
Last week, Unicaja reached an agreement with unions to cut up to 1,513 jobs following the acquisition of Liberbank, leading to annual cost savings of 97 million euros which are part of a 210 million euro cost synergy target per year by 2023.
($1 = 0.8858 euros) (Reporting by Jesús Aguado; editing by Inti Landauro)
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