BARCELONA, 3 (IRIN)
CaixaBank expected to quadruple its profitability in three years to between 12% and 14% from 2017 as well as increase five points –from 15 to 20% – market share in customer funds and lending in four years, according to its strategic plan 2015-2018, explained at a press conference the president of the organization Isidre Fainé and CEO, Gonzalo Gortázar, who on Tuesday presented the plans to analysts and investors in London.
The first objective answers the return on tangible equity (Rote), ie adjusting of equity intangible assets, primarily goodwill, so that in 2014 the Rote was 3.4%.
The goal of Rote translates into a return on equity (Roe) of between 10 and 12%, and CaixaBank wants achieve revenue growth to an average of 5.7% annually, freezing costs and lower provisions –with a lower cost of risk at 0.5% -.
Faine summarized the pillars of the strategic plan: To be leaders in trust, because without trust there is no business, and “confidence strengthen the commercial potential”; have sustainable profitability levels above the cost of capital, maintaining dividends to continue with welfare projects, and leading the digital revolution to offer new financial products and services without losing the personal touch; all to keep growing as a leader in retail banking in Spain with solvency and liquidity.
At the end of the plan, CaixaBank wants to be “a leading financial group in Spain and one of the largest in Europe,” with a global perspective because the economy is, and recognized by social responsibility, quality customer service, financial strength and go one or two steps ahead of competitors in innovation, has riveted.
ENVIRONMENT
You contextualized CaixaBank expects turnover to grow again after several years of decline, the improving economy -something more than 2% per year promedio– with increase in consumption and investment, which will also result in job creation, and because real estate is under start a “moderate growth” in sales and prices –the company predicts that the real estate business can stop giving losses 2017 -.
The bank also provides low interest rates until at least the second half of the plan –with growth from mid-2017 and 12-month Euribor 1.75% or below the end of 2018–, the mystery of regulatory pressure and changing demand a greater weight of investment products and pension plans.
MORE EFFICIENT USE WITHOUT DESTROYING
With more income and equal costs, the company wants to bring the efficiency ratio to 45%, compared to 56.8% today, which Gortázar said can be achieved without destroying jobs, and combining the branches with digital banking.
Have you ruled leftover branches and pointed out that one of the strengths of CaixaBank is its high capillarity in the Spanish territory –tiene 100% coverage in the municipalities of over 10,000 inhabitants -., added to the cost of each office is less than the competition
INCOME AND DIVIDENDS
In the section on higher incomes, CaixaBank expects an increase of 6 Annual% of customer funds; win two points of market share in funds, insurance and pension plans; 4% annual increase healthy credit expromotor, and earn 0.6 points of market share in the total credit.
It also predicts a reduction in delinquency than 60% to less than 4% in 2018, and also a 60% cut in real estate problematic exposure to less than 5,000 million euros at the end of the plan, up from 11,000 today.
“We can grow in regions where we are underrepresented,” he added Gortázar as Madrid –a which will help Barclays–, Galicia, Asturias and the Basque Country, and there are also travel to increase market share in consumer credit and business companies.
Regarding the dividend policy, CaixaBank continue to dole out 50% or more of annual profit and if the equity ratio exceeds 12% by 2017, there will be an extraordinary dividend and / or buyback, announced Gortázar.
LESS WEIGHT OF EQUITY
In the section on costs, CaixaBank wants to reduce the capital cost of the investment portfolio from the current 16% (11% to 5% banking industry) 10% 2018, although no concrete plans about the future of current holdings, said the president of the organization, Isidre Faine, which itself has recognized that the very objectives of the strategic growth plan, “the bank will become increasingly bank” and fall . the industrial weighing
Although the Catalan bank has not finalized its objectives at this point, there are only two ways to get lower cost of capital of investees divest some or reduce the percentage of participation Current .
With regard to whether the Bank La Caixa Foundation is willing to reduce its stake in CaixaBank below 50%, Faine said: “We will do what is best for the bank, but we have important presence. “
INTERNATIONAL
The international strategy will be further developed jointly with other banking partners with commercial collaboration, providing CaixaBank their knowledge in the areas where it is considered excellent such as technology, mobile banking, insurance, consumer finance and micro-credit cards and electronic payments.
CaixaBank has not materialized new target markets, and Gortázar explained that the decision to launch an offer purchase by Banco Português de Investimento (BPI) answered the proximity of the business models of Spain and Portugal as CaixaBank was already majority shareholder, and has insisted that the intention is to keep it as an independent bank and quoted in Portugal.
Faine has avoided comment on possible difficulties to carry out the takeover bid for BPI, and exposed: “We just started the game. We will have to wait for the bid expires and the facts will show what eventually happens “and he added that if necessary make capital in CaixaBank to finance the acquisition will be done.
Asked if still there is room for more purchases on the Spanish financial sector, has opined that the restructuring in Spain is already made. “There may be some more, but not many, if any there”
Yes it has seen the possibility of “sporadic operations in Europe, but not with the experienced intensity in Spain” and exemplified than in the US there is a common financial market and have not seen many integrations
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