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CaixaBank registers a net profit of €305 million during the first half of 2014, 25% less than last year

Barcelona-based CaixaBank, which leads the Spain's banking market, registers a net attribute profit of €305 million during the first half of 2014. This is 25.3% less than 2013 and it is due to extraordinary operations such as the costs of totally integrating Banc de València and the effects of 2012 regulatory regarding the restructuring of toxic real estate assets. Apart from that, the profit attributable to the banking and insurance business, which excludes real estate activity and the investments portfolio, stands at €665 million. The banking business has generated €1.72 billion, representing a 6.8% increase, and highlights the acceleration of the decrease of the delinquency rate, which fell for the second consecutive quarter and now stands at 10.78%, 88 basis points less. 

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25 July 2014 03:09 PM

by

ACN

Barcelona (ACN).- Barcelona-based CaixaBank, which is 58.9% owned by the Catalan banking foundation La Caixa, has registered a net attributable profit of €305 million during the first six months of 2014, 25.3% less than the first half of 2013. According to CaixaBank, this is due to "the negative goodwill generated through the Banc de València acquisition and the requirements of the Royal Decret Law 18/2012" regarding the restructuring of toxic real estate assets. The profit attributable to the banking and insurance business, excluding real estate activity and the investments portfolio, stands at €665 million. The banking business has generated €1.72 billion, representing an increase of 6.8%. This highlights the acceleration of the decrease of the delinquency rate, which fell during the second trimester and now stands at 10.78%, 88 basis points less. During the first half of the year, CaixaBank maintained  its leadership position in Spain with 13.6 million clients, 5,695 branches, a total of €336.85 billion assets and a market share of 27.4% by June 30.


The results of the first semester, which are also the first results of Gonzalo Gortázar as CEO of CaixaBank, have been set back by extraordinary conditions unrelated to purely banking activities including the negative difference after totally integrating Banc de València and the 2012 regulatory effects regarding the restructuring of toxic real estate assets.

Excluding non-recurring costs, the banking business pre-impairment income has reached €1,719 million, an improvement of 6.8% in comparison with the first semester of 2013. This is due to the strong performance of banking business revenues, which has led to an increase of 1.9% in customer funds, 2.9% of net interest income and 4.5% in fees.

The operating margin has also been strengthened by a strong reduction in recurring expenses, which decreased by 6.7%. According to CaixaBank, this is due to the "optimisation" of the structure of the group.

Delinquency rate falls for the second consecutive trimester

A significant trend during the first half of the year  is the continuous decrease of the delinquency rate, after having been steadily increasing for seven years since the last quarter of 2006. During the second quarter of this year, the delinquency rate of CaixaBank – which is chaired by Isidre Fainé – stood at 10.78%, representing a drop of 88 basis points throughout the semester and only in the second quarter it has contributed to a reduction of 58 basis points. This means that the company has entered into a process of acceleration of the downward trend of default. The 10.78% delinquency rate remains at 6.5% if the calculation excludes the impact of real estate activity.

Higher liquidity

The company's liquidity stands at €63,478 million, following an increase of €2.72 billion over the first half. This "comfortable'' liquidity position has allowed CaixaBank to repay €25.084 million of liability balances from the European Central Bank (ECB) funding since it first began in 2013. On June 30, CaixaBank's balance sheet liquidity was 32,145 million euros.

In addition, during this semester CaixaBank sold or leased properties for a total of €1,213 million, 10% more than the first half of 2013. The management of this activity is made through the BuildingCenter society, which acts as a real estate subsidiary of CaixaBank.

The Catalan bank's core capital, which measures the solvency of the company, stands at 12.7% according to Basel III regulations. This means an improvement of 150 basis points of this ratio during the first semester, 61 points of which come from the organic generation of capital and 89 points from the conversion of subordinated debentures.

Loan portfolio reduced by 3.7%

The volume of the loan portfolio stood at €199,572 million euros, a decrease of 3.7% on the figures from the first semester of 2013. This is justified by the trend of deleveraging that drags the Spanish economy, in particular families and businesses. However, CaixaBank notes that this deleveraging during the second trimester, with a decrease of 0.9%, "shows signs of slowing down".

Finally, impairment losses of financial assets and allocations have forced a treatment worth €1,314 million, representing a reduction of 54.3% compared with the same period in 2013.

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  • CaixaBank's headquarters, located in Barcelona's Diagonal Avenue (by ACN)

  • CaixaBank's headquarters, located in Barcelona's Diagonal Avenue (by ACN)