Bankinter achieves a record recurring profit of 845 million euros in 2023, 51% more

Profitability soars to 17.1% and gross margin reaches 2,660 million euros, 27.7% more

Bankinter Group has achieved a record recurring profit in its history of 845 million euros in 2023, which is 51% more than in 2022, despite the impact of the new tax on the financial sector, which for the bank was 77 million euros , as reported this Thursday to the National Securities Market Commission (CNMV).

It is worth mentioning that in 2021 the group exceeded these profits due to the extraordinary impact of the spin-off of Línea Directa, which led it to record a profit of 1,333 million euros. However, without accounting for this extraordinary event, the profit for that year is reduced to 437 million euros.

Returning to 2023, the entity explains that the favorable evolution of interest rates, the increase in volumes in all balance sheet headings and a "more active" management of client assets have led to "substantial growth" in margins and improvements. in profitability and efficiency.

Thus, the interest margin reached 2,213.5 million euros, which represents 44% more than at the end of 2022, while the gross margin (which includes all income) rose to a record figure of 2,660.5 million euros, with a 27.7% increase in the year. The annual growth rate of this margin in the last five years has been 13%.

Commission income amounted to 817 million euros, with 196 million coming from the asset management business. After this, those of the collections and payments business stand out, 182 million euros, with a 10% increase in the year, or those of securities operations, of 121 million euros, growing 10%. Thus, net commissions amounted to 624.3 million, 3% more.

Regarding the operating margin before provisions, it closed the year at 1,667.2 million euros, 43% more, after absorbing operating costs that increased by 8%, as a result of a "higher variable remuneration of the staff for achievement of objectives, growth in contributions to Social Security and the assumption of the costs derived from the creation of a new 'joint venture' in Portugal", explains the bank.

RATIOS

Regarding the different ratios, the return on equity (ROE) reached a "historical figure" of 17.1% from 12% a year ago, with a return on tangible equity (RoTE) of 18.2 %.

The 'fully loaded' CET1 capital ratio reached 12.3%, compared to the regulatory minimum of 7.8%.

Regarding the group's default ratio, it stood at 2.1% at the end of the year, one basis point above the level at which it closed in 2022. In the specific case of Spain, the default rose to 2.4%, although Bankinter highlights that it is "quite below" the average figure for the sector, which according to the Bank of Spain stood at 3.57% in November. Delinquency coverage was 64.7% at the end of the year.

The bank's efficiency ratio stood at 37.3%, which compares "very favorably" with the 44% a year ago, a figure that in Spain is 34%.

Finally, Bankinter points out that the liquidity situation is "optimal" and that it has a volume of deposits over loans of 106%, compared to 102.8% a year ago.

BALANCE

The group's total assets stand at 113,011.6 million euros as of December 31, 2023.

The customer loan portfolio reached 76,885.7 million euros during the year, 3.6% more than a year ago. In Spain, the bank's credit investment grew somewhat less, 1%, given the greater weakness of the real estate market.

Regarding retail customer resources, they stood at 81,574.8 million euros, with a growth of 8.5% over the same figure from 12 months ago.

The volume of resources managed off-balance sheet also experienced strong growth of 18.1%, up to 43,937 million euros, thanks to both the acquisition of new business and the transfer within the bank from other products.

BUSINESS LINES

By business lines, the largest contribution to the bank's gross margin came from the corporate area, whose credit portfolio reached a volume of 32.8 billion euros, a 4.6% increase in the year.

Regarding the Commercial Banking business, the entity closed with managed assets of 103,000 million euros, which means 11% more than a year ago, with a new net assets of 6,000 million euros, while the banking business Asset management recorded a volume of 57,800 million euros of managed assets, compared to 51,100 a year ago, and a net deposit of 3,200 million.

In terms of retail banking, managed assets reached 45.6 billion euros, 10.1% more than the same figure at the end of 2022, and with new net assets captured in the year of 2.8 billion.

By type of commercial banking products, Bankinter highlights that it has been a "good year" for the evolution of resources managed off-balance sheet (investment funds, own and third-party funds, pension funds, wealth management and SICAVs). Specifically, the growth of these resources was 18% during the year, or 6.7 billion euros in absolute numbers.

Broken down by product, own investment funds grew by 15%; third-party funds did so by 18%; 12% more pension funds; and 30% growth for the wealth management and SICAV business.

PAYROLL ACCOUNT AND MORTGAGES

Regarding the evolution of the payroll account portfolio, it experienced a drop in the volume of balances during the year, 13,000 million euros compared to 16,700 million in 2022, although the number of accounts grew by 4%. In the last five years, the portfolio of this modality has increased by 57%.

On the other hand, Bankinter highlights that the balance of residential mortgages at the end of 2023 totaled 34.9 billion euros, with 3.5% growth in the year. In Spain, there has been a slight drop of 0.1%, although a "certain recovery" can be seen in the last quarter.

As for the new mortgage production generated in the year, it amounted to 5.8 billion euros, in total figures for the Group, including EVO Banco, with 39% of these mortgages being at a fixed rate. This represents 14% less compared to the new production in 2022, which was a very positive year, and is related to the drop in activity in the real estate market.

Likewise, Bankinter Investment contributed 233 million euros to the financial group's gross margin. Within its alternative investment business, the subsidiary has already launched 23 structured vehicles invested in different projects in the real economy, with a committed capital of 4.7 billion.

By geography, Bankinter Portugal closed 2023 with a credit investment portfolio of 9,200 million, 16% more than a year ago, while in Ireland, where the bank operates through Avant Money, the portfolio reached 3,000 million, a 34% more. Of this investment volume, 2.2 billion corresponded to mortgages, registering an increase of 41%.

On the other hand, Bankinter Consumer Finance contributed 397 million euros to the group's gross margin, 16% more than in 2022, while the investment portfolio increased by 23% more, to 6.8 billion euros.

Finally, EVO Banco reached the 'break even' of its activity in 2023, with gross margin income that amounted to 66 million euros, 78% more. The investment portfolio reached 3,393 million euros at the end of the year, 25% more than in 2022.