Banking does not escape the adverse effects of the coronavirus crisis, this has been noted in the 2020 income statement of all entities. Y March bench is no exception: it obtained a profit of 69.72 million euros in 2020. This is equivalent to 44.3% less year-on-year, mainly due to the impact of Covid-19 on the accounts of its investment arm, Alba Financial Corporation, of which it owns 15% of the capital.
Its investment company registered a red number of 95 million euros this past year, compared to the profit of 179 million in 2019. The reason for this entry in the red numbers of the Corporation is in the volatility of the markets this last year, marked by the coronavirus crisis.
Despite everything, the result of banking activity before taxes in March remained at 87.3 million euros, 16% lower than in 2019, due to the increase in provisions for bad debts, which increased by 13% in order to anticipate for the effects that the pandemic will have on the loan portfolio. «Even with the extraordinary endowment, Banca March presents a cost of credit of 0.41%, compared to the industry average of 0.73%, “the firm said in a statement. Likewise, net interest income, for its part, remained relatively stable with a reduction of just 0.6% year-on-year.
Regarding the NPL ratio, in line with a good part of the sector, it continued to fall in the entity. It did so to 1.62%, compared to 1.82% a year earlier, although always taking into account that defaults have not yet shown their face given that certain public measures such as credit moratoriums and the lack of loans guaranteed by the Official Credit Institute (ICO) still remain in force. In addition, the bank emphasizes that they have managed to reduce this rate without having to resort to the “massive sale” of delinquent portfolios at a discount.
“The default you have today is related to your credit activity in recent years,” he explains. Jose Luis Acea, CEO of Banca March, to ABC. In his case, it stands out that his solid position in this regard is due to a very careful strategy in order to maintain a historical credit quality. Despite everything, the delinquency will also reach this bank, despite the fact that its current rate is practically residual, soon. “We will see that pressure when economic activity begins to recover and the aid ceases to be in force,” he says. It will be then when defaults show their true reality after the crisis.
Solvency is also one of the bank’s strengths. The CET1 ratio it remained at 18.43%, which is the highest percentage in the sector in Spain. And in terms of liquidity, the ratio stood at 237%, delving into the good financial health of the firm.
Looking ahead to 2021, José Luis Acea explains that they have good feelings about banking activity: «We have started a very lively first quarter, on a growth path. This is due to a constant work to be very explicit in our strategy. It’s being a good first trimester. Although it is true that it is obvious that we have many uncertainties: we will see if we achieve the vaccination objectives, if the fourth wave arrives … ». All in all, the entity plans to continue in its line of specialization and direct dealings with the client and to continue improving its figures this year.
Likewise, regarding the European funds that are expected to arrive this year, the CEO of the Balearic company confirms that they trust to be a relevant actor in their channeling. In this sense, remember that the sector has been pressing as a whole, as ABC advanced, to advance the money from the EU funds and co-finance projects to multiply their effect on the economy.