BANKIA SA 22 July 2016
CONTENTSPage | |
Introduction | 3 |
1. Relevant data | 4 |
2. Economic and financial environment | 5 |
3. Summary of results | 6 |
4. Balance sheet | 14 |
5. Risk management | 17 |
6. Funding structure and liquidity | 20 |
7. Solvency | 21 |
8. Share performance | 23 |
9. Rating | 24 |
10. Significant material disclosures during the half-year | 25 |
11. Appendix | 26 |
Basis of presentation and comparability of information | |
The audit reports incorporated in the consolidated financial statements for the year ended 31 December 2015 include the following Emphasis of Matter paragraph in relation to the legal proceedings associated with the Bankia IPO in July 2011: "We draw attention to the information provided in Notes 2.18.1 and 22 to the accompanying consolidated financial statements, which describe the uncertainties related to the final outcome of litigation regarding the Initial Public Offering of shares carried out in 2011 for the stock market listing of Bankia, S.A. and to the provisions recorded by the Group to cover the estimated costs of this litigation. This matter does not modify our opinion." At 30 June 2016 the abovementioned uncertainties remain so the financial data contained in this document must be interpreted in the context just mentioned and together with the information contained in the abovementioned notes to the consolidated financial statements for the year ended 31 December 2015. | |
Attributable profit for the half-year is 481 million euros, with significant progress in the Group's commercial strategy and further improvements in risk management
The Group ends the first half of 2016 with an attributable profit of 481 million euros. On a constant perimeter basis (excluding, in 1H 2015, City National Bank of Florida's results, which was sold in October 2015), attributable profit is down 8.7% compared to the same period of the previous year. These results reflect the impact of the fall in the Euribor and the repricing of the SAREB bonds, which have continued to squeeze the Group's margins.
In this complex environment, Bankia succeeded in increasing the attributable profit for 2Q 2016 by 3.5% compared to 1Q 2016, thanks to a high level of efficiency and a lower cost of risk, which continue to be key management factors in the current market environment.
The Bankia Group maintains its leadership in efficiency. On a constant perimeter basis, operating expenses are down 2.3% compared to the first half of 2015, and down 3.1% compared to the previous quarter, bringing the efficiency ratio to 46.6%, one of the best in the sector.
Risk management has continued to improve, allowing a reduction in provisioning for loan losses and impairment of foreclosed assets. This improvement is reflected in the cost of risk, which at close of June 2016 stands at 28 bps, an improvement of 15 bps over the half-year.
The new commercial positioning has contributed positively to business performance
The number of customers who have their income paid directly into their account is up 4.5% in the half-year and the number of new credit cards issued has quadrupled compared to the first half of 2015.
New lending increases by 2.5% the outstanding balance of loans in the consumer finance and business segments since June 2015.
Retail customer funds have increased compared to June 2015. The growth is concentrated in mutual funds (+7.3%), demand accounts (+27.2%) and savings accounts (+12.7%), which continue to attract customer funds transferred out of term deposits.
New entries of customer funds reinforces the Group's mutual funds market share, which stands at 5.70% at the end of June 2016 (+43 bps compared to the first half of 2015).
NPLs continue to decline, while asset quality indicators improve
The balance of NPLs has fallen 9.6% since December 2015 and is down 6.5% compared to 1Q 2016, making ten consecutive quarters of falls.
This decline in NPLs has reduced the Group's NPL ratio, which at the end of June 2016 stands at 9.8%, 75 bps less than in 1Q 2016 and 100 bps below that recorded in 4Q 2015.
The NPL coverage ratio stands at 60.8%, up 80 bps compared to year-end 2015.
Financial soundness and strength in terms of liquidity and solvency
The Group mantains a sound retail funding structure. The loan-to-deposit (LTD) ratio stands at 100.2% at the end of the first half of 2016.
The solvency indicators registered a further improvement during the quarter. At the end of June 2016, the Group has a CET 1 phase-in ratio of 14.53% (+64 bps in the half-year) and a CET 1 fully loaded ratio of 12.89% (+63 bps since December 2015), making it one of the most solvent institutions in the Spanish financial system.
Based on this proven financial soundness, as of the date of this report, both Fitch Ratings and DBRS assign investment grade ratings to Bankia.
1. RELEVANT DATA
Jun-16 | Dec-15 | Change | |
Balance sheet (€ million) | |||
Total assets | 203,501 | 206,970 | (1.7%) |
Loans and advances to customers (net) | 109,794 | 110,570 | (0.7%) |
Loans and advances to customers (gross) | 116,475 | 117,977 | (1.3%) |
Loans and advances to the resident private sector (gross) | 93,633 | 93,730 | (0.1%) |
Secured loans and advances (gross) | 68,228 | 69,960 | (2.5%) |
On-balance-sheet customer funds | 132,323 | 132,629 | (0.2%) |
Customer deposits and clearing houses | 107,908 | 108,702 | (0.7%) |
Borrowings, marketable securities | 23,382 | 22,881 | 2.2% |
Subordinated liabilities | 1,033 | 1,046 | (1.2%) |
Total managed customer funds | 155,360 | 155,402 | (0.03%) |
Equity | 12,089 | 11,934 | 1.3% |
Common Equity Tier I - BIS III Phase In | 11,272 | 11,289 | (0.2%) |
Capital adequacy (%) | |||
Common Equity Tier I - BIS III Phase In | 14.53% | 13.89% | +0.64 p.p. |
Total capital ratio - BIS III Phase In | 15.85% | 15.16% | +0.69 p.p. |
Ratio CET1 BIS III Fully Loaded | 12.89% | 12.26% | +0.63 p.p. |
Risk management (€ million and %) | |||
Total risk(1) | 120,146 | 120,924 | (0.6%) |
Non performing loans | 11,751 | 12,995 | (9.6%) |
NPL provisions | 7,141 | 7,794 | (8.4%) |
NPL ratio(1) | 9.8% | 10.8% | -1.0 p.p. |
NPL coverage ratio | 60.8% | 60.0% | +0.8 p.p. |
Results (€ million)
Jun-16 Jun-15 Change
Net interest income 1,124 1,388 (19.1%)
Gross income 1,686 2,029 (16.9%)
Operating income before provisions 900 1,186 (24.2%)
Profit/(loss) attributable to the Group 481 556 (13.4%)
Key ratios (%)
Cost to Income ratio (Operating expenses / Gross income) 46.6% 41.5% +5.1 p.p.
R.O.A. (Profit after tax / Average total assets) (2) 0.5% 0.5% -0.0p.p.
R.O.E. (Profit attributable to the group / Equity) (3) 8.2% 9.8% -1.6p.p.
Jun-16 | Dec-15 | Change | |
Bankia share | |||
Number of shareholders | 337,207 | 435,755 | (22.6%) |
Number of shares in issue (million) | 11,517 | 11,517 | - |
Closing price (end of period) | 0.646 | 1.074 | (39.9%) |
Market capitalisation (€ million) | 7,440 | 12,370 | (39.9%) |
Earnings per share (4) | 0.08 | 0.09 | (6.9%) |
Tangible book value per share (5) | 1.09 | 1.08 | 0.7% |
Additional information | |||
Number of branches | 1,894 | 1,932 | (2.0%) |
Number of employees | 13,449 | 13,569 | (0.9%) |
NPL ratio excludes transactions with BFA (Jun-16: €1,501 million Repo, €461 million collection right, as agreed, 60% of the total estimated IPO contingency and €1 million of collateral provided)
Annualized profit after tax divided by the average total assets
Annualized attributable profit divided by the average 12 months equity
Annualized attributable profit divided by the number of shares in issue
Total Equity less intangible assets divided by the number of shares in issue
Bankia SA published this content on 22 July 2016 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 26 July 2016 12:06:05 UTC.
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