Unicaja s Profit Beats Forecasts Overshadowed By New Mortgages...

Q3 net profit rises 35% to 137 mln euros, above forecasts

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Q3 NII up 34% y/y, beating analysts' forecasts

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New mortgage loans fall 55% y/y in Q3

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Shares fall 5%

(Adds detail on decline in new mortgage production in paragraphs 3 and 4, shares in 6, customer spread in 8)

By Jesús Aguado

MADRID, Oct 30 (Reuters) - Spain's Unicaja said on Monday its net profit rose 35% in the third quarter helped by higher lending income though new mortgage loans fell more than 50%.

Unicaja reported a net profit of 137 million euros ($144.6 million) in the July to September period, more than the 126 million euros forecast by analysts polled by Reuters.

The lender's total performing loan book shrank 7% year-on-year in the quarter, while new residential mortgages, the bulk of its loan book, công ty xây nhà trọn gói fell more than 55% against the same quarter last year and declined 46% compared with the previous quarter.

A decline in mortgage transactions is affecting the whole sector on lower demand for credit.

Spanish households are among the most exposed to a rise in interest rates as around 70% of the country's more than 4 million outstanding mortgage loans are tied to variable rates.

The declines are far more pronounced in the case of Unicaja than for other banks, sending its shares down 5% in early trade. Spain's blue chip index Ibex-35 was up 0.8%.

Spanish lenders, including Unicaja, are managing to offset a decline in mortgages due to higher returns on existing credits, carrying floating rates, while maintaining a lid on costs for deposits.

Yields on Unicaja's loans rose 46 basis points in the quarter to 3.088%, while costs of deposits climbed just 10 basis to 0.474%, widening the customer spread to 261 basis points compared with 226 bps in the previous quarter.

In this context, Unicaja's net interest income, earnings on loans minus deposit costs, rose 33.9% year-on-year in the quarter to 357 million euros.

Lending income was higher than the 353 million euros analysts expected and was 11.5% higher than in the previous quarter.

($1 = 0.9471 euros) (Reporting by Jesús Aguado; Editing by Inti Landauro and Jacqueline Wong)