Grupo Cajamar reports earnings of €93.3 million, up 18.3%06 de Noviembre, 2023
P&L growth and an improvement in credit quality have further strengthened the Group's position based on prudent management, with an increase in provisions and an improvement in solvency and liquidity.
• Business volume continues to grow, with a 7.7% year-on-year increase in customer funds under management, to €50,609 million, and a 3.2% increase in performing loans, which reached €36,708 million.
• Net interest income is up 54.9%, at €768.7 million, as a result of successful commercial activity.
• The NPL ratio is down 0.7 points, at 2.2%, well below the industry average. Non-performing total risks are down 21.5% year-on-year, a reduction of €237 million, while the foreclosed assets coverage ratio has risen to 51.6%.
• The capital adequacy ratio is up 0.5 percentage points at 15.8% as a result of the increase in eligible own funds, which have seen year-on-year growth of 4.6%. The fully loaded CET1 ratio, on the other hand, is 13.4%, complying with regulatory requirements with an ample buffer.
At the end of the third quarter, the focus is back on core banking business revenue, with significant growth in the main profit and loss components. Backed by a steady improvement in credit quality, this has allowed Grupo Cooperativo Cajamar to continue to advance and strengthen its position through prudent management, increasing its provisions and improving its solvency and liquidity.
In the third quarter of 2023, positive business performance boosted recurring revenue and thus also profit and loss margins. Specifically, net interest income rose 54.9% to €768.7 million. Net fee and commission income grew 1.7%, to €201.7 million, as a result of brokerage activity, aided by stronger customer relationships. This, together with operating cost containment, brings gross income to €968.7 million, an increase of 15.8% compared to the same period of the previous year.
Faster growth in revenue than in operating expenses has improved the recurring cost-income ratio, which stands at 49.3%, up 13.9 percentage points compared to the same quarter of the previous year.
The Group continues to prioritise prudent management of credit risk over profit-making, having allocated a large proportion of its revenue to provisions and write-downs and impairment of financial and non-financial assets, specifically €376 million. Thus, pre-tax profit is €106.4 million and consolidated net profit €93.3 million, an increase of 18.3% compared to the third quarter of 2022 and better than budgeted.
On 30th September, the NPL ratio is down 0.7 percentage points at 2.2%, below the industry average, as a result of sound management of non-performing assets. Non-performing total risks are down €237 million, or 21.5% year-on-year. At the same time, net foreclosed assets have been reduced by €277 million, or -39.8%, compared to the third quarter of 2022, while the foreclosed assets coverage ratio has risen, reaching 51.6%.
Total assets are €60,965 million and the total volume of business managed has reached €97,202 million euros.
Customer funds under management are up 7.7% year-on-year, at €50,609 million, largely due to growth in customer funds, both on-balance-sheet (+4.8%) and off-balance-sheet (+26.3%).
Grupo Cajamar’s performing loans have grown €1,126 million, an increase of 3.2% compared to the same period of the previous year, reaching a total of €36,708 million. New business lending has been mainly to the agri-food sector, which accounts for 52.4% of the total; SMEs and micro-enterprises, with 25.6%; and large companies, with 22%. All this has resulted in a further increase in the market share of investment in Spain, to 3%, and brings the national market share in the primary sector (agriculture, fisheries and livestock) to 15.8%.
As a result of the strong sales activity, as of September 30 the customers’ spread (i.e., the difference between the average quarterly rate of interest on the loan book and on customer funds) has increased to 2.95%, which is 1.3 percentage points more than in the same quarter of the previous year.
The alternative use of digital channels among the Group’s more than 3.7 million customers continues to increase, and already Grupo Cooperativo Cajamar has nearly 1.1 million digital customers who do business through the electronic banking channel and the App. Specifically, the number of transactions has increased by 6.4% compared to the same period of the previous year. This includes 56 million transactions through the App and 31 million electronic banking transactions. The number of users of the high loyalty 360º account is up 24.5% year-on-year, reaching 499,000 customers.
Solvency and liquidity
The total capital ratio has risen 0.5 percentage points to 15.8%, with 4.6% year-on-year growth in eligible own funds, thus meeting regulatory requirements by a wide margin, with a capital surplus of €693 million on a fully loaded basis. The fully loaded CET1 ratio, meanwhile, stands at 13.4%.
On the other hand, after the first issuance of €650 million of green senior debt last September, the MREL ratio rose 2.8 percentage points, to 22.8%, thus meeting the requirement due to be met on 1 January 2025.
Grupo Cooperatativo Cajamar has a comfortable level of liquidity. It has available liquid assets totalling €15,117 million and mortgage covered bond issuance capacity of €2,572 million. Here too it easily meets the limits set by the regulator, with a liquidity coverage ratio (LCR) of 193.1% and a net stable funding ratio (NSFR) of 150,9%.
The eighteen rural savings banks that make up Grupo Cooperativo Cajamar play an important role in the modernisation of the rural environment and, through their financial activity and social initiatives, contribute to economic, social and environmental sustainability. Thus, the Group placed two issuances of sustainable bonds (one social and one green) in a total amount of €1,150 million, which will allow it to finance companies and social economy projects that protect the environment. Added to this is the financing of up to €784 million provided for projects undertaken by SMEs and mid-caps, following the agreement with the European Investment Bank (EIB).
The Cajamar cooperative banking group is committed to facilitating and promoting financial inclusion through the efforts of its 5,205 professionals, who provide their services in the group’s network of branches, 33% of which are in towns with fewer than 5,000 inhabitants. Besides its digital channels, electronic banking service and App, the Group also has six mobile branches, which deliver financial services to 43 towns and villages with fewer than 1,500 inhabitants, and 1,506 ATMs.
Lastly, the Cajamar Innova incubator and accelerator for efficient water resource management startups won recognition, this last September, as the best Spanish project co-financed with European Funds in 2023.