Updates with details on NII and forecast, shares, new ROTE target and other metrics in paragraphs 5-10

By Jesús Aguado

MADRID, April 30 (Reuters) - Spain's Caixabank CABK.MC reported on Thursday a 7% rise in first-quarter net profit, thanks to a solid performance of its insurance business and higher fees which offset some pressure on lending income from lower interest rates. The country's biggest lender by domestic assets made net profit of 1.57 billion euros ($1.8 billion) in the January to March period. Analysts polled by Reuters expected net profit of 1.46 billion euros. Caixabank unveiled a new share buyback programme worth 500 million euros. As interest rates rose, Spanish banks benefited from higher lending rates and limited deposit payouts. However, this tailwind has reversed as interest rates have been falling.

Caixabank's net interest income - a measure of earnings on loans minus deposit costs - rose 0.6% year-on-year to 2.66 billion euros. Compared with the previous quarter, it fell 2%.

Analysts had expected NII to come in at 2.69 billion euros.

The lender reiterated it expected NII for the full year to be above 11 billion euros compared to 10.67 billion euros in 2025.

Caixabank shares were down over 2% by 0803 GMT.

JPMorgan said even a small NII miss would inevitably draw scrutiny though the lender's underlying business momentum was striking as it was gaining lending market share and fees and insurance were beating expectations.

A rise of 6.8% year-on-year in fees and a 9.3% increase in insurance revenue helped it raise its return on equity ratio (ROTE) - a measure of profitability - to 17.6% in the first quarter from 17.5% by end-December. It slightly lifted its 2026 ROTE forecast to above 18% from around 18% previously.

Overall, performing loans rose 7% year-on-year in the first quarter, supported by solid economic growth.

($1 = 0.8573 euros)