CaixaBank increases by a third the forecast for the distribution of profits among shareholders for the three-year period ending this year. “We raise our capital return objective throughout the period of the 2022-2024 Strategic Plan, from the 9,000 million euros previously committed for this period, to the 12,000 million euros that we set as a new objective for all three years,” the president of the entity, José Ignacio Goirigolzarri, said this Friday during the general meeting of shareholders in Valencia.
This increase was already noted in the results and the market had taken it for granted for months, although perhaps not in such a large way. But the economic context and the change in monetary policy set by the European Central Bank (ECB) have accelerated the accounts of the financial sector. In the case of CaixaBank, it earned 4,816 million euros during 2023, 53.9% more than the previous year. That is, its highest result, only surpassed by that of 2021, when it earned extraordinary billionaires from the merger with Bankia.
“The plan had very ambitious initial objectives, but thanks to the efforts of the entire CaixaBank team, the trust placed in us by our clients and the support of shareholders, I can announce that we are on the path to surpassing them,” Goirigolzarri said during his intervention at the meeting. The improvement of the strategic plan will not be limited to the distribution of profits among shareholders. The bank, according to its president, also hopes to improve its profitability on equity (ROTE) objective, which had placed it above 12% (the 2023 financial year has already closed with 15.6%).
About excess capital CET1 fully loaded, the one with the maximum capital, the group committed to its strategic plan to distribute what exceeds 12%. Last year it closed with almost 12.4%, so it had nearly 900 million euros in excess. Hence, it once again requested approval from the ECB to carry out a new program to buy back its own shares for 500 million euros, for which it received approval last week and has already begun.
In addition, the board has approved a dividend distribution of 2,890 million euros, which represents an increase of 70% over the cash distribution in 2022. “The total profitability, including both the increase in the share price and the payment of dividends, represents a revaluation of 119% since the beginning of the strategic plan,” detailed the president, who maintained that CaixaBank is now “a more solid, more profitable entity and with a greater capacity to finance companies and families.”
The CEO, Gonzalo Gortázar, has highlighted the bank's “financial strength and leading competitive position,” with profitability that has left behind the period of low returns of the last decade and a half. “It is a reasonable profitability and results in line with our size,” he assured during his speech.
In this sense, he highlighted the strong improvement in the efficiency ratio by just over nine points, up to 40.9% at the end of the year. This is one of the best figures of Spanish listed banks, despite having the largest network of offices and ATMs in Spain. Of course, it also has almost double the market share of BBVA and Santander.
Forecasts 2024
Regarding the end of 2023 and the forecasts for 2024, Goirigolzarri recalled that a worse evolution of the economy was expected due to the uncertainties that existed, such as inflation, the energy crisis and the war conflicts in Ukraine and the Gaza Strip. Despite this, the activity has continued. “Growth this year will go from less to more, thanks to the containment of inflation and the probable reductions in interest rates which, ultimately, will be a stimulus for activity,” said the president.
This favorable outlook will be relevant for the financial sector. CaixaBank, for example, is already close to reaching one billion euros in business volume, thanks, among other things, to its dominance in Spain, where one in three payrolls and pensions is domiciled. Regarding this year, the CEO has assured that good expectations are maintained. “We started the year with enthusiasm, confidence and ambition,” Gortázar concluded. Furthermore, regarding the headquarters, of which the possible return of companies that left Catalonia during the year has once again been in focus. processthe CEO has said “that he feels at home” in Valencia.
Help for families
Regarding aid to indebted families with problems, the CEO recalled the support that CaixaBank offers to its clients. “Since the beginning of the increase in interest rates, we have managed 30,000 operations in Spain between mortgage refinancing and other payment agreements, novations of variable-rate mortgages to fixed-rate mortgages and accessions to the Code of Good Mortgage Practices. 42,000 clients have benefited from all these operations,” he said.
The evolution of rates has been atypical in the last year and a half, with an abrupt rise from 0% to 4.5%. This has meant a shock financial situation that both the banking sector and the Government wanted to prevent from becoming a spike in bad debts. For the moment it has been avoided, and the markets' perspective is that the ECB will begin the path of lowering rates in the coming months. “The reduction will benefit those who have contracted a variable rate mortgage. With the situation of the implicit rates as of February 29, we estimate that some 750,000 CaixaBank clients could benefit this year, which is undoubtedly positive news,” said Gortázar.
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