Caixabank Cut Profits By 19% After Offering $1.252 Billion
2021-01-29 | by CusiGO
Caixabank won 1.131 billion euros in 2020, which is the last financial year before Bankia became the largest bank in Spain. Compared with the previous financial year, it decreased by 19%, mainly due to the impact of coronavirus on the economy. As the current low interest rate has seriously affected its banking business, it decided to provide $1.252 billion of reserves in this financial year, an increase of $91 million in the last quarter.
The interest margin of banks led by Gonzalo Gort á Zar fell by 1% to 4.9 billion euros, which is consistent with the decrease in fixed income donations and credit income, especially due to the impact of ICO credit activities, Low interest rates to protect Spain’s business structure from the impact of covid. However, due to the decline in economic activity and the low interest rate background mentioned above, consumer credit has also been affected.
Caixabank argued that despite this framework, its core business revenue still fell slightly by 0.1% to $8.31 billion, mainly due to the recovery in the third quarter. From October to December, it grew by 2.8%. The development of the committee made this work more complicated, reducing it by 0.9% to 2.576 billion euros. Life insurance is the only business in this financial year, with an annual growth of 7.5% to 598 million euros.
On the revenue side, the agency also saw a 22.8% drop in contributions from its investees to 454 million euros. On the cost side, savings associated with the more than 2000 approved layoffs in 2019 began to emerge, at a cost of $978 million at the time. By 2020, staff costs will fall by 4%.
The difficult economic situation left by covid and the activities related to ICO credit increased customer credit by 7.3% (16.518 billion euros) in this year. The growth rate for enterprises is 16.6%, and the growth rate for public sector services is 43.2%. However, the amount of deposits also increased by 8.1% to 415.408 billion euros.
Although the rising unemployment rate has brought difficulties to the financial year, caixabank has not noticed the increase in overdue payments. On the contrary, overdue payments decreased by 30 basis points to 3.3%. The coverage increased to 67%. The suspicious balance was EUR 193 million.
But caixbank also admitted that it had approved 388641 suspension applications (about 11997 million) by 2020, although the situation will improve in the second half of the year. This is 5% of the bank’s credit portfolio.
Caixabank has informed cnmv that it intends to take advantage of its ability to distribute dividends in fy2020 after the European Central Bank has approved the institutions’ requests, but only to 15% of the mutual benefits it and Bankia receive. It will pay shareholders a gross amount of 0.0268 euro per share in the second quarter of this year, a decision to be submitted to the next general meeting.