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CaixaBank earns €970 million in third quarter, less than last year due to integration of Barclays Bank SAU

CaixaBank, Catalonia's largest financial group and one of the most significant companies in the whole of Spain, reported this Friday net attributable profit of €970 million for the first nine months of 2016, down 2.6% on the same period of 2015, which included a number of one-off impacts associated with the integration of Barclays Bank, SAU. Pre-tax profit amounted to €1,314 million, up 45.2% in comparison to last year.  Impairment losses on financial assets and others totalled €1,177 million, a 33.3% decreased in comparison to last year on account of the reduction in loan-loss provisions.

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28 October 2016 06:27 PM

by

ACN

Barcelona (CNA).- CaixaBank, Catalonia's largest financial group and one of the most significant companies in the whole of Spain, registered a net attributable profit of €970 million during the third quarter of 2016, 2.6% less than last year in the same period. According to CaixaBank, this is due to the effects associated with the integration of 100% of the shares of Barclays Bank SAU. The result before tax stood at €1,314 million, an increase of 45.2%. Impairment losses and others on financial assets amounted to €1,177 million, representing a “significant” decrease of 33.3% compared with the same period allocations in 2015. The delinquency rate continues with its downward trend and stood at 7.1%.


In a context of low interest rates, net interest income of the bank stood at €3,080 million, a decrease of 6.9% in comparison to the same period last year. However, the third quarter contributed €1,039 million to the net interest margin, an increase of 1.8% compared with the previous quarter. According to the entity, this indicated an upward trend in the behaviour of this component of the results.

The result in the first nine months of the year was conditioned by the evolution of income and expenditure, which has caused gross income to reach €5,939 million, 6.6% less, and pre-impairment up to €2,821 million euros, 2.7% more.

Recurring expenses continue to fall

Expenses without taking into consideration extraordinary costs dropped to 2.2% compared with September 2015 and 0.4% compared with the second quarter, following the effects of the synergies from the integration of Barclays Bank SAU and as a result of the early retirement and labour agreements with union representatives. In the third quarter, extra costs arising from this agreement meant extraordinary expenses of €121 million. The changes seen in income and costs have triggered a year-to-date improvement of 4 percentage points in the cost-to-income ratio, which currently stands at 54.9% (53.3% without extraordinary expenses).

Sharp drop in allowances

The improvement of the economic environment permitted the continuation of lower impairment losses on financial assets, which in the first nine months of the year totalled €1,177 million, a 33.3% decrease compared with the same period last year.

This improvement in the economic setting had a positive impact on the delinquency rate, which maintains its downward trend and in September stood at 7.1%, down 1.6 percentage points in comparison to the figure recorded in September last year.

The portfolio of net foreclosed assets available for sale, with coverage of 58.1%, amounted to €7,071 million and was down for the third straight quarter.  

Performing loans were up 0.3% in 2016, thus confirming that the recovery is truly underway. This growth was fuelled by the solid year-on-year improvement in new loans: mortgages (+41%), consumer loans (+44%) and business and corporate loans (+11%). Loans and advances to customers, also known as gross lending, stood at €205,100 million, a decrease of 0.6% in comparison to 2015.

Customer funds stood at €299,673 million, representing an increase of 1% in the first nine months of 2016. The fully-loaded Common Equity Tier 1 (CET1) ratio was 12.6%, up 98 basis points following the private placement of treasury shares made among qualified investors with the aim of strengthening CaixaBank’s capital adequacy within the context of the tender offer to acquire BPI.

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  • Image of CaixaBank's headquarters in Barcelona (by ACN)

  • Image of CaixaBank's headquarters in Barcelona (by ACN)