In a context of great uncertainty, due to the economic effects of the Covid-19 pandemic, the bank led by María Dolores Dancausa saw profits drop 42,4% to 317,1 million euros.
The high provisions to prevent macroeconomic deterioration and the comparison with 2019 extraordinary revenues justify the drop in the Bankinter Group's net income.
Bankinter Portugal, a branch of the Spanish bank, reinforced the growth of its business with customers, with the loan portfolio growing by 7% and customer resources by 6%. In the Portuguese operation, the pre-tax results are 45 million euros.
“The Bankinter Group ends 2020 with results that, despite the complexity of an exercise marked by the impact of the pandemic, show growth in all headings and in the main lines of business”, says the Spanish bank in a statement sent before the market opened.
At the same time, "the Bank maintains the leadership among listed banks in terms of profitability and asset quality and with enhanced solvency that continues to be well above the regulatory requirements of the ECB", the bank emphasizes.
The result of recurring banking activity is 473 million euros, 13,2% lower than in 2019.
In 2020, the Bank constituted provisions in the amount of 242,5 million euros to anticipate the worsening of the macroeconomic situation, which led to the pre-tax result of banking activity falling to 230,5 million euros, 62% less than in 2019.
This drop in decline is due both to generic provisions to safeguard the impact of the pandemic on the quality of the loan portfolio, and to the absence in 2020 of the extraordinary revenues that the institution recorded in 2019 with the purchase of Evo (a Spanish digital bank based in Madrid).
In turn, the profit before tax of Línea Directa, which is presented separately from banking activity, reached 179,6 million euros, 25,7% more than a year ago.
All of this explains the drop of more than 42% of the Spanish group's profit.
Among the main ratios, the return on equity, ROE, remains at 7%. Without taking into account the impact of extraordinary provisions, the institution's ROE would be 10,8%.
Likewise, Bankinter reinforces solvency, with a fully loaded CET1 capital ratio of 12,3%, compared to the minimum of 7,7% required by the ECB depending on the type of business developed by the institution and the levels of non-performing loans.
Bankinter reports a NPL ratio in a downward trend for several years, currently standing at 2,37%, which compares with 2,51% in 2019, that is, almost half of the sector average . In turn, coverage of Non-Performing Loans (NPL) has grown significantly, from 48,4% at the end of 2019 to 60,5% in 2020.
As for liquidity, for the first time Bankinter ends a year with a negative commercial gap, with a deposit-to-credit ratio of 103,2%.
In turn, the debt maturities issued for 2021 are 200 million euros, to which are added 1.000 million euros in 2022. To meet these commitments, the institution has net assets of 20.700 million euros and a capacity issue of bonds of 3.500 billion euros.
In the economic environment of 2020 and in a context of low interest rates, all items in the profit and loss account have grown compared to the previous year.
The interest (financial) margin reached 1.247 million euros, 6,8% more than in 2019, mainly due to the higher volumes of loans granted.
Gross margin (including commissions) totaled 1.709 million euros, which represents 3,6% more than a year ago. More than two thirds of this amount comes from the interest margin. In turn, the contribution of commissions to this gross margin is 29%, that is, 496,8 million euros, of which 157 million come from the asset management business and 98 million from the securities transaction business (plus 22 % than in 2019), in a year that was particularly positive for this intermediation activity.
This item was negatively impacted by regulatory costs (contributions to the Deposit Guarantee Fund, Single Resolution Fund and others) that continue to rise, rising to 115 million euros in the year under review, compared to 95 million in 2019.
The operating margin before provisions ends the year at 880,2 million, 4,5% more than a year ago, with operating costs increasing 2,7%, mainly due to new investments in the acquired businesses.
The efficiency ratio of banking activity with amortizations stands at 48,5%, improving slightly from the previous year's 48,9%.
Credit portfolio grows 7% in Portugal
Regarding Bankinter's balance sheet, the Group's total assets amount to 96.252,1 million euros, 15% more than in 2019.
Loans to customers reached 64.384,3 million euros, an increase of 6,6%. Credit growth in Spain, excluding Evo, is 6,1%, compared to the industry average of 2,4%, according to data from the Bank of Spain in November.
In turn, the resources of retail customers amounted to 65.009,9 million euros, up 12,5%. The growth of these resources in Spain, without Evo, was 13,3%, compared to the industry average of 8,4%, according to data from November.
The growth in business with customers was also the trend at Bankinter Portugal. The loan portfolio grew by 7%, reaching 6.600 million euros at the end of the year.
On the other side of the balance sheet, customer resources grew by 6%, reaching 4.800 million euros; and off-balance sheet resources increased by 2%, totaling 3.600 million euros.
As for margins, double-digit growth is observed: 10% in interest margin (financial margin) and 13% in gross margin (including commissions), “driven by the good performance of commissions”.
However, the pre-tax result, which is 45 million euros, falls by 31%, mainly due to the fact that the bank stopped releasing provisions this year, contrary to what happened in previous years, having started to realize them.
Bankinter Portugal was recognized with the distinctions of Best Bank for the “Consumer's Choice 2021” in the Small and Medium Banks category and the “Five Stars” award for Mortgage Loans.
The selection carried out by an independent consumer panel gave Bankinter Portugal the best score out of seven, with an overall rating of 81,14%.
With regard to the group as a whole, the institution based in Madrid says that, in relation to the corporate business, at the end of 2020 the credit portfolio reached 28.400 billion euros, 11% more than a year ago. Considering only the portfolio in Spain, growth is 11,5%, which compares with the sector's average 8,1%. For this growth, loans guaranteed by the Instituto de Crédito Oficial (ICO) had a strong role, with 8.600 million euros formalized, of which 6.000 million have already been made available.
The Bank's global corporate loan portfolio, which amounts to 28.400 million euros, of which 10.600 million euros corresponds to large companies with a turnover of more than 50 million euros; the portfolio of large SMEs (between 5 and 50 million in turnover) totals 7.000 billion euros; and small and medium-sized companies, up to 5 million in turnover, correspond to 5.200 million euros. “In all of them, Bankinter maintains a controlled delay, with this ratio standing at 7,4% for small and medium-sized companies and 3,4% for larger SMEs”, says the bank.
In the commercial banking or private banking business, private banking (private banking) ends a financial year with assets under management of 42.800 million euros, which represents a 6% growth compared to 2019, after raising 2.700 million euros of new net worth. As for the immediately lower segment, Personal Banking, growth was 9%, with a new net worth of 2.300 million euros.
Bankinter's mortgage portfolio, despite the halt in activity in the most difficult months of the pandemic, grew in Spain, and without considering the Spanish bank Evo, 1,7%, which compares with the 1,5% drop in the sector, from according to November data from the Bank of Spain. The new mortgage production carried out in the year totals 2.900 million euros, just 3% lower than 2019, having been a very positive exercise. Approximately 56% of new mortgages are contracted on a fixed rate basis and have a loan to value of 60%.
As for the Consumer business, operated by Bankinter Consumer Finance in Spain, Portugal and Ireland, the figures “reflect the consequences of the pandemic on household expenses, which were reduced due to months of confinement, mobility limitations and decreased economic activity. global". Even so, the loan portfolio remains at values similar to those of the previous year: 2.900 million euros, with a controlled NPL ratio of 6,2%.
"In this business, it is worth highlighting the consolidation of Avantcard in the Irish market as one of the main Consumer operators, which now sees its activity extended to the mortgage market through the new Avant Money brand", highlights the bank.
As for Línea Directa Aseguradora, which this year presents its results in a disaggregated form from banking activity, pending its launch as an independent entity, it reaches a net result of 135 million euros, 26% more than in the previous year, with a 35% ROE and a combined ratio of 83,4%. The solvency ratio II is 276%.
The number of insurance risks totaled 3,22 million, plus 1,7%, with the volume of premiums issued growing slightly to 899 million euros.