Consolidated Results Presentation Second quarter, 2015

Transcription

1 Consolidated Results Presentation Second quarter, 2015

2 Índice general KEY QUARTERLY HIGHLIGHTS MOST SIGNIFICANT FIGURES RESULTS BUSINESS BRANCHES AND EMPLOYEES RISK MANAGEMENT LIQUIDITY CAPITAL PERSPECTIVES CONCLUSIONS 2

3 1 Key quarterly hightlights Increase in traditional business profitability, as the 11% rise of ex carry-trade Net Interest Income shows. Important increase in Customers Managed Funds in the last 12 months, nearly 600 EUR millions (2,1%), mainly due to sight deposits and off-balance sheet items. Confirmation of credit reactivation, with a new production y-o-y increase over 20%, specially due to agrofood sector, other SMES and small businesses. Progressive reduction of NPL, with a y-o-y decrease of 420 EUR millions (168 millions of second quarter 2015) and a 1,18 p.p. improvement of NPL ratio in the last year. Confortable liquidity position, improving progressively the commercial gap, with wholesale funding maturities covered the next years, high capacity of covered bonds issuance, big volumens of assets discountable in ECB, wide compliance of new liquidity ratios. At 30 th june the Capital Ratio is 11,33% and the CET 1 Ratio 10,92%, without significant variation from previous quarter. 3

4 2 Most significant figures (EUR thousands) 30/06/ /12/2014 Business Annual Abs. % Total Assets ,6% Customers' retail resources ,0% Gross loans ,3% Solvency CET 1 ratio (%) 10,92% 11,09% (0,17) Capital ratio (%) 11,33% 11,78% (0,45) Risk management NPL ratio (%) 14,35% 17,10% (2,75) Gross loans coverage ratio (%) 48,65% 49,22% (0,57) Profitability and efficiency ROA (%) 0,10% 0,09% 0,01 ROE (%) 1,42% 1,33% 0,09 Cost-income ratio (%) 60,92% 41,84% 19,08 Recurrent cost-income ratio (%) 64,22% 59,76% 4,46 Other data Employees (10) (0,2%) Branches (34) (2,6%) 4

5 3 Results (I) P&L (EUR thousands) Acum. 2T 2015 Acum. 2T 2014 Abs. o/ ATA Abs. o/ ATA Abs. % NET INTEREST INCOME ,42% ,30% ,52% NET INTEREST INCOME (ex Carry-trade) ,36% ,15% ,85% Net fees and commissions + Foreign exchanges (net) ,70% ,70% (8.759) (6,11%) Gains (losses) on financial transactions (net) + Other ,17% ,02% ( ) (84,77%) GROSS INCOME ,29% ,03% ( ) (29,43%) GROSS INCOME (ex Carry-trade and financial profits) ,08% ,80% ,18% General administrative expenses ( ) (1,39%) ( ) (1,14%) (33.228) 14,24% Depreciation and amortisation (38.310) (0,20%) (39.473) (0,19%) (2,95%) NET INCOME BEFORE PROVISIONS ,69% ,69% ( ) (61,79%) RECURRENT NET INCOME BEFORE PROVISIONS ,58% ,71% (35.911) (24,57%) Impairment losses (net) ( ) (0,69%) ( ) (0,76%) (15,50%) Net provisions + Other gains/ losses ,06% (7.618) (0,04%) PROFIT BEFORE TAX ,06% ,90% ( ) (93,52%) CONSOLIDATED NET PROFIT ,10% ,60% ( ) (84,31%) Y-o-y 5

6 3 Results (II) Net Interest Income improves progressively, specially the one coming from the traditional business (ex. carry-trade) +10,85% +2,81% ,83% Acum. 2T-14 Acum. 2T-15 Net interest income of typical business (EUR thousands acum.) 1,36% 1,15% Carry trade Other NII Quarterly Net interest income (EUR thousands) Acum. 2T-14 Acum. 2T-15 Net interest income of typical business o/ata (acum.) 6

7 3 Results (III) Important improvement of the cost of term deposits, as a result of the progressive reduction of the new production interest rates The sight deposits increase weight, which also has a positive impact in the overall cost of deposits 1,93% 1,85% 1,78% 1,52% 1,42% 1,30% 1,42% 1,32% 0,71% 0,58% 0,41% 0,43% 0,48% 0,71% 0,74% 43,00% 44,24% 45,79% 46,16% 50,69% Term deposits cost Customer's retail resources Difference New production Portfolio Deposits at sight Term deposits 7

8 3 Results (IV) The net commissions chapter continues having a significant importance in the P&L account ,69% 0,68% 0,71% 0,71% 0,69% Net fees and commissions (EUR thousands) Net fees and commissions o/ata (acum.) 8

9 3 Results (V) Lower importance of extraordinary results to build up the P&L account although the income coming from typical increases its importance +8,18% Other Portofolio financial profit Gains (losses) on financial transactions (net) (EUR thousands) Acum. 2T-14 Acum. 2T-15 Gross Income of typical business (EUR thousands) * * Gross Income without carry-trade and financial profits 9

10 3 Results (VI) General administrative expenses have increased from 3Q 2014, due to the incorporation of the new state tax over deposits, but mainly because of the externalization of Recovery and Foreclosed assets management General administrative expenses (EUR thousands) Total expenses (EUR thousands) 10 Amortisation (EUR thousands)

11 3 Results (VII) Creating a deterioration of Cost-income ratio 55,70% 60,47% 59,76% 65,56% 64,22% Recurrent cost-income ratio Although it has improved in June from previous quarter 11

12 3 Results (VIII) The ongoing reduction of NPLs allows a reduction in the impairment losses recognized in the P&L account Acum. 2T-14 Acum. 2T-15 with full recognition of the real-estate impairment ,37% 76,76% 77,50% 78,15% 78,78% Impairment losses (EUR thousands) Acum. 2T-14 Acum. 2T-15 Real estate NPL ratio (%) -0,69% -0,76% Impairment losses (% o/ata) 12

13 3 Results (IX) The profitability on Assets and Equity, improve from the end of the year +0,01 p.p. +0,09 p.p. 0,09% 0,10% 1,33% 1,42% Acum. 4T-14 Acum. 2T-15 ROA Acum. 4T-14 Acum. 2T-15 ROE 13

14 4 Business (I) Credit reactivation with a growth higher than 20 % of new production, mainly in strategic segments + 20,8% ,90% 77,28% 37,6% +0,39 p.p. y-o-y 33,9% Acum. 2T-14 Acum. 2T-15 New production of credit (EUR millions) SME Agrofood Other Weight of strategic financing o/new production (%) Strategic financing Other % strategic financing o/total loans 14

15 4 Business (II) Beginning of an expansion of Credit, with positive growth rates of Loans ex-re developers and a reducing weight of RE developers loans + 1,02% - 18,5% T-14 2T-15 Loans ex-re developers (EUR millions) Loans RE developers (EUR millions) 15

16 4 Business (III) Year-on-year moderate growth of the Customers retail resources, principally through sight deposits +0,81% y-o-y +1,26% q-o-q ,9% y-o-y Deposits at sight Customers' retail resources (EUR millions) Deposits at sight Term deposits Other resources 16

17 4 Business (IV) Increase of Off-balance sheet resources, mainly investment funds The Funds managed have increased almost 600 EUR millions in the last 12 months 17,0% y-o-y 2,1% y-o-y ,8% y-o-y Off-balance sheet resources (EUR millions) Investment funds Savings insurance Pension funds Other resources 2T-14 2T-15 Customers' retail resources + Off-balance sheet resources (EUR millions) 17

18 4 Business (V) Market shares National: Deposits ORS: 2,15% Credits ORS: 2,54% With increasing market share in the Financial Sector 2,54% 2,54% 2,15% 2,51% 2,14% 2,44% 2,47% 2,11% 2,12% 2,11% Credits ORS market share (%) Deposits ORS market share (%) Between the first 15 financial groups, # 13 by Business and # 12 by Net Interest Income and Gross Income, at 31 december

19 4 Business (VII) Shareholders With the confidence of more than 1,4 millions of shareholders 1,399 1,405 1,388 1,375 1,364 Shareholders (millions) 19

20 5 Branches and employees With an optimization of the commercial network based on the improvement of the commercial and operative efficiency And a commercial network, with presence in 41 provincias and 2 autonomous cities T-13 4T-14 2T-15 Branches T-13 4T-14 2T-15 Employees 20

21 6 Risk management (I) Gradual decrease of NPL ratio 15,53% 14,35% -1,18 p.p. y-o-y 2T-14 2T-15 NPL ratio (%) 21

22 6 Risk management (II) Progressive reduction of NPL with an important improvement of Coverage ratio +6,19 p.p. y-o-y ,87% ,68% Variation of Gross Loans NPL (EUR millions) 2T-14 2T-15 Coverage ratio (%) 22

23 ago-14 Dec-12 Dec-13 Dec-14 Jun-15 7 Liquidity (I) Improvement of financial structure relies on: Reduction of commercial gap Wholesale funding at a comfortable level and open access to markets Gap Commercial position (EUR millions) 23

24 Dec-12 Dec-13 Dec-14 Jun-15 ago-14 Dec-13 Jun-14 Dec-14 Jun-15 ago-14 7 Liquidity (II) Compliance with new liquidity ratios: LCR june 2015: 467,7% NSFR june 2015: 110,1% LCR december 2014: 150% NSFR december 2014: 106,3% 387% 468% 182% 150% Loans To Deposits 118,1% 112,4% 110,7% 110,8% 101,40% 104,80% LCR (%) 106,30% 110,10% 4-1 a g o 3 c-1 e D 4-1 n Ju 4 c-1 e D 5-1 n Ju 24 NSFR (%)

25 7 Liquidity (III) High capacity of liquid assets generation (EUR thousands) Descontable debt available * Issuance capacity of covered bonds Issuance capacity of territorial bonds Total * Available in the policy of collateral of the ECB and other assets with possibility of collateral 25

26 8 Capital Phased In Fully loaded Sound group Solvency: 11,33% Solvency: 10,46% High quality of own funds CET 1: 10,92% CET 1: 10,04% Leverage ratio 5,80% 5,34% CET 1 evolution (%) Risk Weighted Assets evolution 9,1 10,9 11,1 10, Dic-12 Dic-13 Dic-14 (CET1) Jun-15 (CET1) Dec-12 Dec-13 Dec-14 Jun-15 RWA (EUR millions) 26

27 4T T T T T T T T T Perspectives (I) Economic recovery confirms in Spain The economic growth in Spain is favoured by internal demand increase 2Q 14 3Q 14 4Q 14 1Q 15 Real GDP (q-o-q, %) 0,5 0,5 0,7 0,9 Household consumption 1,0 0,8 0,9 0,7 Expenditure by government (0,4) (0,1) (1,0) 1,6 Gross fixed capital formation 2,0 1,1 1,4 1,3 Construction investment 1,3 0,5 1,4 1,5 Equipment investment 3,6 2,2 1,9 1,4 Exports 0,7 3,9-1,0 Imports 2,1 5,0 (0,6) 0,8 Real GDP (y-o-y, %) 1,2 1,6 2 2,7 This increase is bigger than in the Euro Zone Spain Euro Zone 0,9 0,7 0,5 0,5 0,4 0,3 0,2 0,1 2Q 14 3Q 14 4Q 14 1Q 15 Real GDP (q-o-q, %) The housing price has stopped falling down 5,7 0,3 1,8 1,5-5,4-4,3-1,9-11,2-12,8-7,8 Source: Eurostat and Instituto Nacional de Estadística Housing price index (HPI), annual variation (%) 27

28 9 Perspectives (II) In the last 12 months the employment has increased in persons The rate of annual variation of the occupation improves significantly in year-on-year terms, although is similar that in 1Q The active population increases in persons, rising the rate of annual variation from 0,07 % in 1Q to 0,17 % in 2Q 2,97% 2,96% 0,07% 0,17% 2,53% 1,59% -0,19% 1,12% 2T 14 3T 14 4T 14 1T 15 2T 15-1,00% -1,04% 2T 14 3T 14 4T 14 1T 15 2T 15 The unemployment rate decrease 2,10 p.p. y-o-y 24,47% 23,67% 23,70% 23,78% 22,37% Source: Instituto Nacional de Estadística 2T 14 3T 14 4T 14 1T 15 2T 15 28

29 9 Perspectives (III) The economic growth of spanish economy is bigger than Euro Zone, nearly 3%. Support of household consumption, joined to the tax reform and public investment. Improvement of the labor market and favorable evolution of the employment, with a rate of unemployment that will continue falling down. The confirmation of the economic recovery will be a revulsive to the growth of banking business, though the environment of low interest rates will propitiate major growth of the offbalance sheet items than the traditional term deposits. Scenario of NPL reduction, due to the improvement of the real economy and major dynamism, which will translate in continuing reducing of NPL in the Group and stimulating the sale of foreclosed assets. Improvement of liquidity in the sector for the intervention of the ECB. Increase of the credit fluency toward social agents, specially individuals and SMES, and in our case also specially the agrofood Sector. Commercial and operative efficiency as a key objective of financial sector in the digital age". 29

30 10 Conclusions Improvement of traditional business profitability Confirmation of credit reactivation NPL decrease Comfortable position of liquidity and solvency 30

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