CaixaBank meets all the new provision requirements and earns €48 million in just one term
Spain’s largest bank presented its results for 2012’s first quarter. Barcelona-based CaixaBank has reduced its profits by 84% compared to the same period last year in order to immediately fulfil all the new financial requirements decreed by the Spanish Government in February. The Catalan bank has allocated €2.44 billion in provisions in the last quarter. CaixaBank’s CEO explained they wanted to concentrate their efforts in this first quarter. Besides, the bank’s President explained that despite Repsol-YPF’s episode in Argentina, they will carry on with their expansion plan in the Americas, with the support of Carlos Slim, opening new branches in Chile, Colombia and the United States.
Barcelona (ACN).- Spain\u2019s largest bank, Barcelona-based CaixaBank, presented its results corresponding to the first quarter of 2012 in the Catalan capital on Thursday. CaixaBank has decided to drastically reduce its profit this last term in order to fulfil in only a few weeks all the Spanish Government\u2019s new financial requirements, approved in February. Therefore, CaixaBank has reduced its quarterly profit by 84% compared to the same period in 2011, earning \u20AC48 million but allocating \u20AC2.436 billion in provisions in order to strengthen its core capital once again, which now represents 12.4%. Furthermore, the Catalan bank has a liquidity of \u20AC29.436 billion, 10.6% of its total assets. Joan Maria Nin, CaixaBank\u2019s Vice-president and CEO, explained they wanted to fulfil the new financial requirements as soon as possible; therefore, since they had the strength to do so, they decided to adapt by the end of March to the requirements approved in February, concentrating the efforts over this first term and drastically reducing profit. Nin used a Catalan idiom to explain the effort, which could translate into English as \u201Cnow that we\u2019re calm, from this moment on, we will find glory\u201D. CaixaBank\u2019s President, Isidre Fainé, said \u201Cthere is no other country in the world that has made such an important reorganisation effort\u201D than Spain. Besides, Fainé stressed their intention to continue expanding CaixaBank\u2019s banking and industrial business in the Americas, despite YPF\u2019s expropriation by Argentina. CaixaBank owns 12.8% of Repsol\u2019s shares. In fact, Fainé asked to find \u201Ca fair price for YPF\u201D, and underlined that an episode like that cannot be solved in only a few days. He added that \u201Ca match does not end when a goal is scored. It lasts many minutes, and it is still very early to tell how this match will end\u201D. Furthermore, Fainé stated that CaixaBank, which is mainly owned by the savings bank La Caixa, will open new branches in Chile, Colombia and the United States. In addition, he emphasised the agreement the Catalan bank has with the Mexican billionaire Carlos Slim, President of the financial group Inbursa. Fainé said that Slim is the \u201Cideal partner\u201D to carry on with CaixaBank\u2019s expansion in both Americas.
On Thursday CaixaBank released a note presenting its results for the first quarter of 2012. Later on, a formal presentation at one of Fira de Barcelona\u2019s pavilions was held, with the presence of the Catalan bank\u2019s main managers. In their press release, CaixaBank stated they have improved their margins. The exploitation margin has increased by 25.3% compared to the previous year, interest margin by 10.2%, and gross margin by 8.3%, reaching \u20AC1.672 billion.
\u20AC2.44 billion in provisions this last quarter
Nin explained during the presentation the structure of the \u20AC2.436 billion in provisions, allocated in order to meet in just one quarter with all the new financial requirements. \u20AC1.835 billion come from CaixaBank\u2019s generic provision. \u20AC359 million come from an additional provision of funds and the remaining \u20AC601 million have been added to cover a hypothetical devaluation of the real estate assets.
CaixaBank\u2019s President, Isidre Fainé, explained the state of their real estate assets, representing \u20AC1.574 billion: \u20AC1.227 billion correspond to already-built apartments, \u20AC54 million to apartments under construction and \u20AC262 million to plots of land. Fainé explained the criteria that the provision for their real estate business have followed: provisions covering land plots correspond to 86% of their valuation price; those for apartments under construction represent 76% of their valuation price; finally, provisions for already-built apartments correspond to 55% of their valuation price. Joan Maria Nin added that, if the sales and rentals continue to last year\u2019s levels, CaixaBank could place all the apartments it owns by 2014 on the market, since they are placing 10,000 housing units per year.