June 18, 2021

Caixabank achieves an accounting profit of 4.786 million after integrating Bankia into the historic ERE


Madrid

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First accounts of Caixabank Y Bankia as a single entity, although still with nuances since the integration was carried out almost at the end of March. The group’s profit amounted to 4,786 million euros in the first quarter of 2021, due to an accounting entry (negative goodwill) resulting from the merger. Excluding extraordinary items, the firm’s earnings amounted to 514 million, which is almost six times the data from a year ago.

“The negative goodwill It is the result of discounting from Bankia’s equity (13,088 million euros) the acquisition price paid by Caixabank (5,314 million euros) and a series of accounting adjustments when putting different assets and liabilities at fair value (3,474 million euros) » , says the bank in a statement. Likewise, it is reported that “Caixabank’s income statement in the first quarter does not include the results generated by Bankia’s activity in the period” in question; only assets and liabilities have been incorporated for the moment.

As expected, the volume of assets of what is already the leading bank in Spain at the group level (counting Portugal) amounts to 663,569 million euros. The volume of customers, although adding the gross customers of both banks last September the figure should have been around 23 million, now the figure is at 21.1 million. The entity then anticipated that they would even drop to 20 million, given certain duplications, among other reasons.

Of the profit without extraordinary items, 444 million correspond to banking and insurance activities; 58 million to BPI; and 12 million to participations. «If the aggregation of the income statements of
CaixaBank and Bankia
, the proforma result without extraordinary items associated with the merger would be 580 million euros, compared to 184 million in the first quarter of last year “, indicates the entity.

Net interest income fell 0.7% to 1,191 million euros, while commissions grew 0.2% to 659 million. Core revenue increased 1% and gross margin increased 4%. For the bank, they are symptoms that activity is recovering and it could begin to face a certain economic normality. In terms of profitability, ROE, for its part, stood at 6.6% and ROTE at 6%, with an efficiency ratio of 54%.

NPL remains contained at 3.6%, with a coverage ratio of 67%. The doubtful, together with Bankia, amount to 14,077 million, with joint provisions for bad debts of 9,415 million. Solvency, measured by the CET1 ratio, stands at 14.1% and liquidity, according to the LCR ratio, at 273%.

Historical ERE

These results, with the recovery they represent compared to the first quarter of 2020, are produced in
full negotiation of the ERE
over almost 7,800 workers, the largest in financial history in Spain. A process against which the unions predict mobilizations starting today at the presentation of the numbers to the press, as well as at the shareholders’ meeting on May 14.

Yesterday the bank presented its ambitious relocation plan for those who are forced to leave the entity, although it did not convince the workers’ representatives. It’s more,
they sent a letter to the FROB
, that is, the State, which owns 16.1% of the capital stock, so that it takes a position against the employment adjustment and, also, that the new president, José Ignacio Goirigolzarri, more than triples his salary with respect to when he ran Bankia.

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