CaixaBank earns 4181 million first 2021 half post Bankia merger and the lower impact of the pandemic - CaixaBank won 4,181 million euros in the first half of the year, compared to 205 million euros a year ago, according to accounts submitted to the CNMV before the opening of the market. However, between the two years there is an important change that distorts the bank's accounts, the merger with Bankia. From the second quarter, the contribution of Bankia is included in the attributed result.

The integration represents a net positive contribution for accounting purposes of 4,300 million for the negative trade fund or badwill, and a negative of 1,397 million for the cost of the personnel restructuring process and other expenses associated with integration.

Without taking into account the extraordinary results of the merger, the CaixaBank group would have made a profit of 1,278 million euros in the first half of the year. This figure would be comparable with the proforma profit result of the same period last year of 347 million euros where the business of Bankia would also have to be counted in the second quarter to be comparable by perimeter with the results presented today.

CaixaBank earns 4181 million first 2021 half post Bankia merger

The interest margin amounted to 3,275 million euros in the semester (-2.3% compared to the same period in 2020). This decrease is due to the fall in credit income due to lower interest rates, and the change in portfolio structure, with a greater weight of ICO loans and credit to the public sector, and a lower contribution of financing to consumption, an effect partially reversed by a greater appeal to the ECB in better financial conditions.

Dividend income (152 million euros) includes those of Telefónica and BFA (Banco de Fomento Angola) for 51 and 98 million euros, respectively (50 and 40 million in 2020). The attributed results of entities valued by the participation method (217 million euros) are recovered in the context of the improvement of the pandemic (+79% compared to the first half of the previous year and +45.1% compared to the first quarter of 2021).

The gross margin, despite the increase in core and investee income, decreased by 0.6%, mainly due to the lower results of financial operations, with a reduction of 68.4%, and the higher charges recorded in other income and operating expenses, increased by 12.2%.

CaixaBank earns 4181 million first 2021 half post Bankia merger

Recurring administration and amortization costs fall slightly, by 0.6%, reflecting the management of the cost base and stability in staff costs. This effort in reducing costs, together with the evolution of core revenues that grew by 1.2%, allows the improvement of the core efficiency ratio by 2.1 percentage points, to 54.6% in the last 12 months.

Finally, the allocations for insolvencies are -451 million euros, compared to -1,814 million in the first half of 2020, which included the registration of an allocation of -1,450 million to anticipate future impacts associated with Covid-19.

Following the dividend limitations imposed by the European Central Bank, the Board of Directors yesterday approved the dividend policy for the financial year 2021, establishing a cash distribution of 50% of the consolidated net profit adjusted for the extraordinary impacts related to the merger.

The CEO of CaixaBank, Gonzalo Gortázar, stressed that the entity “has successfully completed the first phase of the merger, after presenting a very good biannual result and having reached a labor agreement for the reorganization of the entity”.

CaixaBank earns 4181 million first 2021 half post Bankia merger

In addition, he announced that “after four months of intense and fruitful integration work, we have decided to revise upwards the cost savings targets to 940 million annually", compared to the 770 million initially calculated.

CaixaBank figures in 1,884 million euros the cost of the employment regulation file (ERE), whose quota, 6,452 employees, has been covered after raising a total demand of 7,900 applications.

The CEO of CaixaBank, Gonzalo Gortázar, has defended that the employment agreement reached with the staff is satisfactory because it has benefited both the people involved and the entity. "We have been reasonable and responsible," said the manager.

"In addition to being necessary, the agreement is clearly reasonable. All exits are going to be voluntary. We are talking only and only about voluntary departures, the size of the ERE of 6,452 people. Given the template size and the fact that there is an overlap derived from the merger, it is very reasonable," he added.

CaixaBank earns 4181 million first 2021 half post Bankia merger

More news:

The Supreme condemns Banco Santander to return more than 900,000 euros to an electrician for lack of transparency

Banco Santander will have to pay more than 900,000 euros to a client for not having informed him enough about a risk product that he contracted.

This is what a recent Supreme Court ruling dictates, which thus obliges the bank to return the money invested by an electrician in a complex financial derivative placed by Banco Popular, subsequently absorbed by Santander in 2018.

The complexity of the contract, of sale of options on shares (CCVO), "required exhaustive information that is not known to be offered to the plaintiff, which caused the error in the plaintiff, given its limited financial training", explains in the judgment the high court.

Thus, he values the training of the client-whom the bank qualified as a retailer-who had studied a VET, is an electrician and worked as a miner, he says, so he was not related to the sector.

Therefore, the Supreme Court understands that the client was not aware of the risk of the operation and that he did not give his consent in a valid way, so it annuls the contract and condemns the bank to return the amount of money invested, as well as to pay the procedural costs.

It thus rejects the bank's argument that the customer was an 'aggressive investor', had training in these types of products and understood their complexity and risk.

The case has its origin in 2007, when the Popular placed this person a structured deposit with shares of the bank as an underlying that, after the loss of value, he had to execute, with the consequent loss of money, so he went to court to request its return.

The matter has ended up reaching the Supreme Court, which also rules on the controversial issue of deadlines and possible prescription, since the lawsuit is filed in 2016, which would exceed the 4 years granted by law, as claimed by the bank.

The Chamber, however, recalls that after that first contract came a concatenation of others that also had an impact, since "it caused an increase in the burdens of the investor". It also refers to case law to point out that it must "count the last concatenated contract contracted", which took place in 2014, so it considers it within the deadline.

Juan Ignacio Navas, managing partner of Navas & Cusí and lawyer of the firm that has directed the defense, applauds that the court ruling reproaches the banking malpractice of placing a complex and high-risk product "without due transparency to those who do not have the ability to understand the nature and risks of what is contracted", reports El Confidencial.