Bankinter bank's profit fell 50% to 220 million in the third quarter compared to the same period last year, with the bank justifying this drop with the Covid-19 pandemic and the making of provisions.
“Bankinter increased the provision of provisions in order to prevent the economic impact of the pandemic, in line with the prudence strategy followed throughout this period, reinforcing the total coverage in a very significant way”, according to a statement from the Spanish bank released this Thursday. market.
Banking income before tax reached 153 million, 68% less than September 30, 2019, “due to the absence of extraordinary revenues in 2019 and, above all, to the provisioning of provisions to support the impact of the crisis that, in this quarter , increased 51 million euros due to the worsening macro environment and new forecasts released by the Bank of Spain, adding up to a total of 243,5 million euros in these nine months ”.
Excluding provisions, and 2019 extraordinary revenues, the result of recurring banking activity reached 396 million, 7,6% less than the result achieved in September 2019.
In relation to Bankinter Portugal, the bank saw pre-tax results drop by 36% to 33 million euros. The institution says that it “made provisions in the amount of 8 million euros in order to prevent the impact of macroeconomic deterioration, which, together with the fact that the institution has stopped releasing provisions, as was the case in previous years”.
The bank points out that the “recurring business continued at a good pace, resulting in growth in all income account items: 10% more in interest margin, 11% more in gross margin and a margin before provisions that grows 60 %, supported also in the containment of costs, which decrease 8% ”.
Analyzing the main ratios, Bankinter points to the “reinforcement of solvency” with the fully loaded capital ratio CET1 standing at 12%, “well above the minimum required by the ECB and entirely suited to the type of business that the institution develops and its NPL ratio ”.
The Spanish bank argues that it “is in a much better situation than its competitors, with a non-performing ratio that, despite the context, improved 22 bp relatively a year ago, standing at 2,51%. Likewise, the bank increased its total coverage by almost 11 percentage points, reaching 61,7% ”.
Profitability “was affected by the increase in provisions, with return on equity, ROE, standing at 7,1%. Excluding the impact of extraordinary provisions, the institution's ROE would be 10,86% at the end of the third quarter, above capital costs ”.
The bank says that for the “first time” it reaches a “higher proportion of deposits than credits, with a ratio of 101,3%”.
In relation to Bankinter Consumer Finance, which also operates in Portugal, the bank says that this business was “affected by a generalized reduction in household consumption, a consequence of the months of confinement and by the mistrust of the economic situation, which led to a reduction of 21% in new credit production compared to the same period in 2019. Even so, the loan portfolio grows 4% compared to the same period of the year, reaching 2.900 million euros, with a non-performing ratio of 8,2% ”.
The bank led by María Dolores Dancausa says that “all income account items show significant growth, which shows that the bank's activity has remained at a good level in this very difficult period”.
The interest margin amounted to 927 million euros in the third quarter, 8% more than in the same period last year, “mainly due to the higher volumes of credit”.
In turn, the gross margin reached 1.296,3 million euros, 4,6% more than the same period last year. “Of these revenues, 71% come from interest margin and 28% come from commissions, 359 million euros, almost a third of which originate from the asset management business, and the role of the securities transaction business is also important. to be acquired and from which commissions amounting to 69 million euros, 26% higher than in the same period in 2019 ”.
The operating margin before provisions reached 694,6 million euros, up 6,8%, “with operating costs this quarter being significantly lower, by 3%, than in the third quarter of 2019. As for the banking activity efficiency with amortizations, improves 100 basis points compared to a year ago, reaching 48,1% ”.