Grupo Cooperativo Cajamar posts profit of 67.4 million euros, up 33.4%

• Customer funds under management up 6% year-on-year, while off-balance sheet funds grow 28.9% due to increase in mutual funds (+69.1%), savings insurance (+7.3%) and pension plans (+3.3%).

• Customer deposits and performing loans rise 4.1% and 1.8% respectively in 2017.

• Non-performing loans declined by 15%, with NPL ratio dropping close to 2 percentage points, while the gradual reduction of Non-performing assets continues, with a 651 million-euro fall year-on-year.

• Phase-in capital ratio up 2.54 percentage points to 14.25%, with phase-in CET 1 ratio standing at 11.44%, comfortably above SREP requirements.

Third-quarter 2017 consolidated results presentation (PDF 3,3 MB.)

Income statement

At 30 September, Grupo Cooperativo Cajamar posted a consolidated profit of 67.4 million euros, 33.4% more than for the same period of the previous year, thanks to year-on-year growth in net interest income of 0.4% to 421.8 million euros. This improvement was fuelled by an increase in sight deposits – now accounting for 70% of total customer deposits – and a reduction in interest rates on new term deposits, helping to cut finance costs at a time of historically low interest rates.

Added to this is the uptick in disintermediation fees for the advise in the sale and management of mutual funds, insurance products and pension plans , which have grown 35.05% year-on-year, offsetting the -3.78% decline in fees from basic services to customers.

Most noteworthy in this respect are the good results from the strategic agreements with GENERALI, TREA and CETELEM, which are leading to increases in: life-risk insurance premiums (+11.5%); pension plans total contributions (+33.8%); assets under management in mutual funds (+69.1%); and new consumer finance (+187.8%).

Recurring gross income, i.e. gross income net of extraordinary gains or losses on financial assets and liabilities and the contribution to the Education and Promotion Fund, is up 5.8% to 659.8 million euros. This, combined with the 3.1% year-on-year fall in administrative expenses, due mainly to containment of personnel expenses and overheads, gradually drove down operating expenses as a percentage of average total assets and contributed to the 6.03 percentage-point improvement in the recurring cost-to-income ratio to 68.61%. Year-on-year growth of 31% in recurring net income before provisions takes the return on equity (ROE) to 2.97%.

Risk management

The NPL ratio continues to fall, dropping close to 2 percentage points versus the same quarter in the previous year to 11.8%. NPA also continued to decrease by 651 million euros over the last 12 months, primarily because of the reduction in NPLs, representing a -15% year-on-year change, and the successful commercial management of foreclosed assets, with sales of foreclosed assets up 59.5%. Additions of this type of assets are down 21.6%.

Provisions for impairment losses on non-financial assets have helped push up the foreclosed assets coverage ratio to 47.02%.

Improved capital strength and ample liquidity

In the third quarter of 2017, Grupo Cooperativo Cajamar improved its capital position and maintains a comfortable liquidity position. The phase-in capital ratio stands at 14.25%, 2.54 percentage points higher than in the third quarter of the previous year. The Group boasts high-quality capital, since the phase-in CET1 ratio (capital and reserves) stands at 11.44%, while the Tier 2 ratio (second category capital) is 2.81%. Moreover, the fully-loaded CET1 ratio is11.21%, well above the supervisory requirement.

The Group enjoys a comfortable liquidity position, with debt maturities fully covered for the next few years, free access to the markets and high volumes of ECB-eligible securities. The liquidity coverage ratio (LCR) stands at 218.59%, while the net stable funding ratio (NSFR) is 114.90%. Meanwhile, the loan-to-deposit ratio (LTD) has improved to 107.12%.

Increase in deposits and lending

The Cajamar Group’s customer deposits swelled by 1,026 million euros (4.1%) from the start of the year, while performing loans to customers increased by 1.8% to 27,609 million euros, with a continued focus on lending to the strategic sectors (agrifood and SMEs).

Grupo Cajamar remains a leader in the Spanish agrifood segment, with a market share of around 13%, thanks to its broad range of specialised products and services (Crediagro and Agropymes) for cooperatives and companies across the agrifood chain, and the strength of its relationship with and social commitment to this sector. This is demonstrated by the research and knowledge transfer that takes place through its experimental centres, network of university professorships, and training schools for cooperatives.

Equally, the Group continues to bolster its presence in the SME segment thanks to its offering of high value-added, comprehensive products and services (international platform, retail platform, state subsidies platform and franchising platform) and tailored products (Credinegocio and Credipyme). It is recognised for the quality of the service it provides, its customer knowledge, and its closeness and accessibility, through its extensive branch network. This is shown by the loyalty of the Group’s customers according to the customer satisfaction survey conducted by Stiga.

Total assets are up 2.4% at 39,910 million euros. Highlights include customer funds under management, with year-on-year growth of 6%, reaching a total of 30,226 million euros, and off-balance-sheet funds, which are up 28.9% at 3,881 million euros, due to increase in mutual funds (+69.1%), savings insurance (+7.3%) and pension plans (+3.3%).

Lastly, Grupo Cooperativo Cajamar is pushing forward with expanding its branch network in regions in which it has less presence and in those where the agrifood and service sectors are particularly active. It has opened new offices in the Canary Islands, Asturias, Andalusia and Aragon, and at 30 September its network comprised 1,077 branches and 5,712 employees.