Bankia : steadfast in its commitment to achieving 10% return on equity in 2015

• José Sevilla, the bank's chief executive, announces principal objective of the Strategic Plan will be reached despite challenging interest rate environment
• Sevilla underlines that credit is beginning to flow more freely in the form of new lending to SMEs and households
• Spanish bank is in a better position than its European competitors after more extensive restructuring, and having achieved the highest efficiency ratio on the continent

Bankia has resolved today to achieve a return on equity (ROE) of at least 10% by the end of next year, as set forth in its 2012-2015 Strategic Plan, despite the challenges faced by the banking business due to low interest rates and business volumes, which are poorer than envisaged when the plan was unveiled in November 2012.

Bankia's CEO, José Sevilla, reminded those listening to his speech at the 10th Banking Industry Meeting hosted by IESE that the bank has hit practically all the targets set in its three-year plan 12 months ahead of schedule, and also that the principal objective of achieving a ROE of at least 10% will be met.

According to Sevilla, this will be accomplished despite the headwinds faced by the financial sector, with very low interest rates, limited asset growth and a reduction in interest income.

Despite this, Bankia's chief executive underlined that there are positive signs on the horizon such as a rise in new lending to SMEs and households (+17.3% between October 2013 and October 2014), especially consumer loans to individuals and loans to SMEs. 

The gradual improvement now and in the future in Spain is, says Sevilla, the result of the efforts made to restructure the country's financial system, which have been far more intense than in the rest of Europe and the United States.

In this regard, the workforce of banks in Spain has been cut by 19% compared to 8% in the EU and no change in the United States. Meanwhile, the number of branches has been slashed by 24% in contrast to 11% in the EU and 3% in the United States.

All this has paved the way for an improvement in the efficiency ratio compared to Europe's and greater productivity (assets per employee are up 10% over the last five years, with assets per branch 26% higher). This sees Spanish banks enjoying a higher efficiency ratio that their European counterparts just when the single supervisory mechanism for banks comes into force.