Bankia achieves a profit of 703 million in 2018, 39.2% more

Bankia achieves a profit of 703 million in 2018, 39.2% more

Bankia obtained an attributable profit from 703 million euros in 2018, representing an increase of 39.2% with respect to 2017, following the incorporation of BMN, as reported by the entity on Monday to the National Securities Market Commission (CNMV).

In ordinary terms, the profit stood at 788 million, which represents a decrease of 3.4% compared to the 816 million earned in the previous year.

This difference occurs after making an extraordinary provision of 85 million after taxes for the sale of a portfolio of unproductive assets to Lone Star of a size of 3,070 million at the time of the agreement. In return, this operation will save 200 million euros in the three years after its closure.

In this way, the benefit remains at 703 million in 2018 if the extraordinary provision for the sale of portfolios is subtracted (39.2% more than the 505 million last year, when a charge of 312 million was made for the merger) , despite the losses of 40 million euros that was recorded in the last quarter of the year.

The president of Bankia, José Ignacio Goirigolzarri, stressed that the year 2018 has been, from the strategic point of view, "very important" for the entity because it has integrated BMN "in a record time and magnificently", which opens "enormous" possibilities for the future and added that the merger has already provided an increase in the customer base.

Goirigolzarri has shown, in addition, "great confidence" in the transformation of the entity in the year that has just begun. "We entered in 2019 with a new organization, an organization designed for the future, a much more agile and much more ambitious organization, and that, of course, will give us results in the short, but also in the medium and long term. term, "he stressed.

For his part, the CEO of the entity, José Sevilla, stressed that it closes a year "very important" in everything related to health balance and the growth of the capital ratio, which will reach 12.51% when the transactions in progress are closed.

During 2018, Bankia raised interest margin by 5.5%, up to 2,049 million euros (although, if BMN was included in the 2017 profit and loss account, this line would fall by 9.6%). Fee income increased by 25.3% (3.4% in a homogeneous comparison) and results from financial transactions increased by 11.5%, which allowed the gross margin to advance by 11.3% (6 , 3% with BMN) and will be 3,368 million.

The gross margin of clients grew up to 1.58%, a level that is comparable to that achieved in the first quarter of 2017 and that, previously, was not achieved since the second half of 2013. This figure was five basis points higher than the one of the last quarter of 2017, growth that was motivated by a lower cost of the deposits and a slight increase of the yield of the credits.

The Operating expenses grew 20.7% due to the integration of BMN, but in a homogeneous perimeter they fell by 4.3% thanks to the acceleration of the capture of synergies after the merger, which now amount to 130 million euros, compared to the 66 million that were foreseen for this moment. With this, the margin before provisions increased by 1.4% (-9.1% in proforma), to 1,498 million.

The ordinary credit provisions and foreclosures amounted to 437 million, 2.5% less than the previous year, which allowed to reduce five basic points, to 0.18%, the cost of recurrent risk.


With these results, the board of directors will propose to the general meeting of shareholders a 5% increase in the dividend per share, up to 11,576 cents (11,024 cents in 2017). Thus, the total amount that will be paid to the shareholders of Bankia will amount to 357 million euros, compared to 340 million the previous year. The pay-out thus reaches 50%.

With the current participation of 61.4% held by the FROB in Bankia, this dividend will mean a new advance in the process of repayment of the aid amounting to 219 million euros. Thus, the total amount of aid repaid after the payment, which is scheduled for April, will amount to 3,083 million euros, of which 961 million correspond to the five dividends paid since 2014.

Likewise, the bank decreased by 6,000 million unproductive assets (NPA) in 2018, which stood at 10,900 million, compared to the 16,900 million of the previous year. This means, according to the entity, that it has achieved more than doubling the target set to reduce 2,900 million per year during the three years of the Strategic Plan.


Within the reduction of unproductive assets, 3,702 million corresponded to the reduction of doubtful assets, which remained at 8,416 million, which is equivalent to a delinquency rate of 6.5%, and is 2.4 points less than a year ago.

The other 2,300 million drop in NPA was due to the decrease in foreclosed assets, which remained at 2,462 million. In addition to the "large operation" of asset sales, Bankia sold off 13,300 units in organic sales, for a sale amount of 646 million, 7.2% more than a year earlier.

In terms of solvency, Bankia closed the year 2018 with a CET1 'fully loaded' capital ratio of 12.51%, which includes the effect of the sale of portfolios of unproductive assets and the reorganization of bancassurance operations. This means an increase of 56 basis points over the previous year and generate 775 million euros of capital in the year.

If the capital gains of the sovereign debt portfolio at fair value are included, the CET1 'fully loaded' ratio is 12.62%. The total solvency ratio amounted to 16.34%, representing an increase of 161 basis points in the year.

Under the 'phase in' metric, which is the one required from a regulatory point of view, the CET1 capital ratio stands at 13.80%. This figure computes the latent capital gains of the debt portfolio available for sale and does not include the sale of the unproductive assets portfolio. The excess of capital over the SREP regulatory requirements is 524 basis points.

In the liquidity section, Bankia also achieved an improvement at the end of last year with a loan-to-deposit ratio of 91.2%, compared to 93.9% the previous year.


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