Ibercaja earns 115 million in the first half, 22.2% more

Ibercaja earns 115 million in the first half, 22.2% more

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The main items in Ibercaja’s income statement have reflected a positive behavior in the first half of 2022. Thus, recurring income grew by 4.7% year-on-year, to 470 million euros, while expenses fell by 4.1% year-on-year, raising the net profit to 115 million eurosas reported by the entity in a press release.

These results will contribute to feeding the reserve fund that the Ibercaja Banking Foundation has undertaken to endow in the coming years and that has been authorized by the Bank of Spain. This operation will allow it to comply with the current Law on Savings Banks and Banking Foundations, along with Ibercaja Banco maintains its will to complete its IPO process.

Enabling this alternative makes it easier for the IPO operation to be carried out at the most propitious market situation, without the conditioning factor of the term, which was December 31, 2022.

The Bank, in turn, has strengthened the asset quality indicators in these six months, reducing the default rate to 1.9%, which recovers the minimum levels of the last fifteen yearsthus placing it among the lowest in the sector.

The coverage ratio has increased to 81.6%, from 75.3% at the end of 2021, one of the highest among comparable entities. Ibercaja maintains its Solvency level with a CET1 Fully Loaded capital ratio of 12.4%.

Investment funds and life insurance

Customer funds have stood at 68,480 million euros, 2.4% below the end of 2021, due to the impact that the negative evolution of the capital markets has had on the valuation of investment funds, investment plans pensions and savings insurance. Without considering this effect, resources grow 980 million euroswhich represents 1.4% so far this year.

Assets and insurance under management represent 44.5% of all the Bank’s customer funds, an item that in the first six months of the year it yields 7.8%up to 30,469 million euros, as a result of the aforementioned market volatility.

For its part, the balance of customer deposits has increased by 2.4% with respect to the end of December 2021.

Net contributions to investment funds have reached 531 million euros in the first half of 2022, which represents 8.9% of the total net entries into the system at the national level. The market shares for Ibercaja Gestión and Ibercaja Pension stand at 5.7% in the first case and 3.4% and 11.9% in the case of individual pension plans and employment plans, respectively.

The investment fund and the Sustainable and Solidarity pension plan have made donations amounting to 1,035,000 euros, an initiative closely aligned with the social purpose of the four shareholder foundations of the Bank: Ibercaja Banking Foundation, Caja Inmaculada Foundation, Caja Círculo Banking Foundation and Caja de Badajoz Foundation.

On the other hand, the new production of risk insurance reached 37 million euros in the first half of the year, 2.6% above that registered in the same period last year. This activity has been driven mainly by risk life insurance, which increased by 31.6% compared to the first half of the previous year.

With all this, the portfolio of insurance premiums has increased by 8.1% to 158 million euros from June 2021 to June 2022, offering 9.1% growth in non-life insurance and 5.6% in risk life insurance. Thus, the contribution of risk insurance to the gross margin amounts to 53 million, 3.9% above what it meant a year ago.

Financing of companies and first homes

Ibercaja has formalized in the first half of the year has led it to formalize loans and credits for a volume of 3,120 million, 15.5% above the first half of the previous year.

In particular, within the framework of its commitment to the strategic segment of companies, the Bank continues its promotion of the productive activities business, which has led to an increase in the credit balance in the semester of 2.3%183 million, and has continued to increase its market share by 7 basis points so far this year (latest data available as of May 2022).

The new production destined to the financing of non-real estate productive activities has accumulated in the first semester 1,432 million euros, 12.3% higher than the volume formalized in the same period of the previous year, far exceeding the target set by the entity for this first semester.

Additionally, formalizations of current credit for companies have been 4,910 million euros, 33.4% more than those of the first six months of 2021. Of this heading, 965 million correspond to June, a figure that has meant the historical maximum achieved by the Bank in one month.

The entity is accompanying the private sector in obtaining and materializing the aid offered by the European Next Generation funds, advising companies, freelancers and individuals on access to funds.

The volume of formalized mortgages reaches 1,012 million euros, 85.6% above that of the first six months of 2021driven, among other factors, by the preferential conditions offered to the group of younger customers for the purchase of their first home.

Recurring benefits exceed pre-pandemic levels

iRecurring revenues have grown by 4.7% year-on-yearup to 470 million euros, thanks to the increase in commissions for banking activity and the stabilization of the interest margin with respect to the first half of last year.

Bank commissions have increased by 14 million, as a result of increased commercial activity and the new rates, and non-bank commissions have accounted for 6 million euros. Compared to the first half of last year, these revenues have increased by 10.3%, representing 21 million.

In this way, the interest margin remains stable in the semester with respect to the same period of the previous year and increases by 5.2% in the second quarter of this year.

On the other hand, recurring expenses have decreased by 4.1% compared to the same period last year, fbased on personnel cost savings originated by the Employment Regulation File that has been carried out and that was agreed by the majority of the representatives of the Bank’s workers. At the end of June, all the approved departures have already materialized, amounting to 750 employees and 134 offices have been closed. With all this, the Bank has achieved improve its recurring efficiency ratio to 60.1%from the 65.6% recorded in June of last year.

The progressive recovery of income, together with the cost adjustment measures, have allowed Ibercaja to exceed the recurring profit before provisions that it generated prior to the pandemic, reaching 188 million euros in the analyzed period21.7% higher than the first half of 2021.

Total provisions have fallen by 8.9% year-on-year, assuming those derived from the cost of risk a decrease of 17.5%.

Net attributable profit was 115 million euros, 22.2% higher than that obtained in the same period of the previous year, after a tax contribution of 30 million through Corporation Tax. This benefit is equivalent to a return on capital (annualized ROTE) of 8.7%, which shows the improvement in the entity’s profitability profile, thus approaching the target set of 9% for the end of the current Challenge 2023 Strategic Plan.

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