Grupo Cajamar increases its performing loan book 9.2%, with a focus on corporates and the agri-food sector

The Group has supported customers affected by the pandemic with new financing and moratoria.

Results as of September 30 reflect the solid business evolutions, the decline in the NPL ratio and non-performing loans and the increase in capital, improving the solvency and CET1 ratios.

• Grupo Cajamar achieves a consolidated net profit of 14.6 million euros, 82.2% lower than a year ago, after increasing its NPL coverage ratio by 8.56 percentage points, in comparison with the same period last year, arriving to 56.11%, including 75 million euros of provisions specifically allocated to face the impact of covid-19.
• On balance sheet customer funds grow by a 15.4% y-o-y, thanks to the increase in demand deposits that grow by 25.2%.
• Effective management of operating expenses places the cost-income ratio at 51.9%.
• Continued improvement of the total non-performing risks management, with a decline of 17.2% y-o-y while the NPL ratio continues its downward trend to 5.11%, converging with the sector average. Gross foreclosed assets continued declining and are now 4.7% lower than in third quarter of 2019.
• The phased-in solvency ratio improved to 14.74% and the phased-in CET 1 ratio rose to 13.06%, while the fully loaded ratio ended the quarter at 12.46%, comfortably above requirements.
• Clients have grown significantly up to 3.5 million, 1.5 of which are loyal customers. Digitisation advances with an increase of digital customers up to 905,000, 14.3% higher than one year ago, 687,000 mobile banking customers, a gain of 38.2%, and 305,000 clients with a Wefferent account, growing by 41%.

Business Growth

The strong business performance is reflected in the y-o-y increase of 15.5% in total assets to 52,690 million euros and the growth in total funds by 12.2% standing at 86,594 million euros.

On-balance sheet customer funds grew by 15.4%, lifted by the increase of 25.2% in demand deposits, while off-balance sheet funds rose by 2.7%.

The increase in the lending activity pushed the year-on-year growth in performing loans to customers by 9.2% reaching 31,376 million euros, especially those to our strategic segments like corporates and agri-food, which rose by 20.4% compared to the same period last year, boosting the Group’s share of performing loans to retail customers to 48.7%.

Thanks to the assets and business volume evolution, Grupo Cooperativo Cajamar was ranked number 11 among significant institutions in Spain, and the entity of reference regarding the primary sector, with a market share of 14.78%, thanks to its knowledge of the sector, its capacity to offer an extensive range of specialised products and services, and the technical advising and knowledge transfer campaigns it carries on for businesses, cooperatives and producers.

Grupo Cajamar is also advancing in its differential performance as a cooperative bank committed to people, local communities and sustainable development and has achieved a new increase in its market share in deposits, which stands at 2.45%, and in credit, where it holds a 2.87% of share.

Results

Supported by the net interest income growth, 2.2% year-on-year, which continues to be the main component of the gross margin, as well as the optimization of operating expenses, Grupo Cooperativo Cajamar obtained a consolidated net result of 14.6 million euros until September, 82.2% lower than the third quarter of the previous year, after improving the NPL coverage rate by 8.56 percentage points and placing it at 56.11%, including the extra provision of 75 million euros to reinforce coverage to face the effects of covid-19 on the economic activity of businesses and households.

The cost-income ratio stands at 51.9%, reflecting the 1.14% reduction in operating expenses relative to average total assets.

Risk Management Continues Improving

Grupo Cooperativo Cajamar continues cleaning up its balance sheet and improving its coverage on credit risk. The NPL coverage ratio is now at 56.11%, 8.56 percentage points higher than one year ago, and the non-performing asset (NPA) coverage ratio improved to 55.58% -including debt forgiveness in the foreclosure procedure-, 4.76 points stronger than in the same quarter of the previous year.

There was also progress in the management of total non-performing assets, which declined 17.2% with respect to the third quarter of the previous year (€364 million lower), bringing the NPL ratio down to 5.11%.

In addition, the volume of gross foreclosed assets dropped 4.7% thanks to sales of €373 million, while the foreclosed assets coverage ratio moved to 55.27%, including debt forgiveness in the foreclosure procedure.

Solvency and Liquidity

The phased-in capital ratio stands at14.74%,the CET 1 ratio improved to 13.06% on a phased-in basis and to 12.46% in fully loaded terms. In this context, it exceeds the levels required by the supervisory authority with high-quality eligible capital and a buffer over the solvency requirement of 424bp and €979 million.

Grupo Cooperativo Cajamar has a comfortable level of wholesale funding and a solid liquidity position with available high-quality liquid assets of €8,718 million, a liquidity coverage ratio (LCR) of 120.65% and a net stable funding ratio (NSFR) of 127.18%, thereby complying with the limits mandated by the European Banking Authority. It also has maturities covered over the coming years, unhindered access to markets and is well placed to generate liquid assets as it has the capacity to issue up to €3,045 million in mortgage-backed securities.

New Branches and Digitisation

Grupo Cajamar's commercial activity provides services and products of value to its more than 3.5 million customers, who are tended to by 5,465 staff members across 926 branches and 142 agencies.

In relation to its plans for expansion and new branch openings, Cajamar has broadened its presence in Galicia, the Basque Country and Extremadura with the opening of three new branches in Lugo, Vitoria (Álava) and Plasencia (Cáceres).

In its digital banking activity, Grupo Cajamar continues advancing and now has 905,000 digital customers, 14.3% more than one year ago, 687,000 mobile banking customers, up 38.2%, and 305,000 customers with Wefferent accounts, an increase of 41%.

Support for Those Affected by the Covid-19 Crisis

The cooperative bank Cajamar is pursuing intense activity to manage the covid-19 crisis, helping to finance and provide liquidity to corporations, SMEs, the self-employed and households in the communities where it operates, in line with the mission, values and principles of the 18 credit cooperatives and the Cooperative Social Credit Bank that make up its financial group.

According to the data at 30 September, it has managed debt moratoria of 825 million euros for its customers and special covid-19 financing for an aggregate of 2,379 million euros. In addition, it has promoted and collaborated with social welfare initiatives with other institutions and non-governmental organisations.

Agro DNA

Grupo Cajamar continues working to transfer knowledge to the agri-food sector through its Agri-Food Knowledge Community, in which 6,354 persons have enrolled, an increase of 51% from the previous year. Cajamar also conducts research, studies and testing at its experimental centres in Almería and Valencia, which have been visited by 833 visitors in the year to date. It also organised 14 knowledge transfer and in-person training activities, attended by 1,333 people, and after the outbreak of the pandemic a further 33 online courses and conferences for its Agro DNA community with another 2,857 participants.

Furthermore, in the first nine months of the year, it has published and presented new publications such as ‘Observatory of the Spanish agri-food sector in the European context: 2019 Report’, 'A roadmap for Spanish citrus farming', ‘ANICE-Cajamar Barometer of the Spanish meat industry in the second half of 2019’, ‘Comparative synthetic analysis of the agri-food sector in Spain’s various autonomous communities in 2019’, ‘Comparative synthetic analysis of the Spanish agri-food sector in 2019’, ‘Economic-financial diagnosis of agri-food cooperatives in Spain (2015-2017)’, ‘Strategic aspects of agri-food cooperatives as a function of their size. An application to the Canary Islands’ and ‘Analysis of the socioeconomic impact of the values and principles of the social economy in Spain’, 'Agrarian Economics and Natural Resources', as well as several ‘Agronotas’ or analyses of the economic variables in the agri-food sector.

The Group also published a new volume of the collection of Mediterranean Economic Studies titled ‘Marine Biodiversity’, coordinator by the popular scientific writer Manuel Toharia.