CaixaBank plans to pay 1,440 million to the State in dividends and share repurchases in three years if it does not divest

CaixaBank has presented this Tuesday its first strategic plan since the absorption of Bankia and that includes this year and the following two. The entity has announced that it plans to pay its shareholders 9,000 million euros over the next three years through a repurchase of shares of 1,800 million, a dividend of 50% of the profit and an excess of capital that would benefit investors. The State, which is the owner of 16% of the bank after the merger, would benefit from this distribution and would have access to 1,440 million euros until 2024.

The FROB, the bank rescue fund through which the State is a shareholder, would obtain this capital as long as it decided to remain a shareholder during the three years that the strategic plan lasts. Currently, the FROB has a sales mandate before the end of 2023, although this date is for the departure of the bank shareholders, although this date has already been delayed on two previous occasions. It is not ruled out that the State could continue to be a shareholder beyond that horizon, given the difficulty of recovering a relevant part of the aid that was injected into Bankia. Currently, the shares are worth a fifth of what remains to be recovered.

The strategic plan is used by CaixaBank to explain to the market what its pillars of activity will be in the next three years. Among other issues, it aspires to increase its income by 7% per year and its operating margin by 15%. “We have a privileged starting position”, assured Gonzalo Gortázar, CEO of the bank.

Thus, the bank plans to increase its income even in businesses where it already has a leadership position in the banking sector, such as investment funds and insurance. As Gortázar explained, there are still avenues for growth in these businesses since the customers who came from Bankia are not as linked —more than one product with the same bank— as those who were already at CaixaBank. In addition, the penetration of these products in the sector as a whole is less than the European average, which is why Gortázar has pointed out these sections as growth paths for the entity in the next three years.

The bank indicates other business niches, such as services linked to the aging of the population. Also in mortgages, where it is expected that the contracting of these loans during the next three years will be 50% higher than that which has occurred during the previous three years. In addition, it plans to round off this business for the purchase of housing with related services such as the hiring of alarms, the installation of solar panels, or the sale of electrical appliances, computers or televisions.

This last section is one of the growth levers that the bank has pointed out in the consumer credit business. "We believe that it has significant growth potential and that it will rise 30% compared to the previous three years," Gortázar assured at a press conference at the former Bankia headquarters, in the Kio towers in Madrid. Part of this growth will be due to the increase in activity that CaixABank anticipates in Wivai, a platform for the purchase (and financing) of electronic products and household appliances owned by the bank. It foresees 1,200 commercialized units in the next three years.

CaixaBank has ruled out making further cuts in staff and branches during the years that the new strategic plan lasts. “We have done the restructuring of the network and staff that we had to do”, assured José Ignacio Goirigolzarri, president of the entity, pointing out that the size that is considered optimal for the banking group has already been reached.

CaixaBank's forecasts for this strategic plan are based on a context in which there are already interest rate rises. Thus, for this year it hopes that the Euribor remains at 0.32%, next year at 1.48% and at 1.56% at the end of the period of the strategic plan. The bank considers this as the "base case."

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