Grupo Cajamar posts profit of €86.7 million in first three months of the year

In the first three months of the year, the strong numbers seen in Grupo Cooperativo Cajamar's commercial activity and in recurring revenue from the financial business lifted all income statement margins, which recorded double-digit growth and allowed improvements in solvency, the cost-income ratio and the profit margin.

• Solid business performance drives double-digit growth in all income statement margins. The improved customer spread lifts net interest income up by 46.8 %, gross income higher by 37.1 % and operating income 74 %.

• Customer funds under management grow 7.8 % to reach €52,565 million and performing loans rise 1.3 % to €36,890 million. 

• With a strong and diversified credit portfolio, the Cajamar Group is positioned at the end of the quarter as one of the significant financial institutions with the lowest NPL ratio, which stands at 1.98%. 

• The phased-in capital adequacy ratio improves 0.5 percentage points to 16.2 %. Eligible own funds grow 4.5 % and the phased-in CET1 ratio rises to 13.9 %, comfortably above the regulatory requirements.

Results

In the first three months of the year, the strong numbers seen in Grupo Cooperativo Cajamar's commercial activity and in recurring revenue from the financial business, both in on-balance sheet funds and in performing loans, lifted all income statement margins, which recorded double-digit growth and allowed improvements in solvency, the cost-income ratio and the profit margin. These advances were also accompanied by greater quality and diversification of the loan portfolio, with a reduction of the risk profile, after recording one of the lowest NPL ratios of significant Spanish financial institutions. 

Net interest income grew by 46.8 % to reach €305.3 million, lifted by the favourable trend in interest rates on new lending, which propelled the return on customer loans 68.6 % higher than in the same quarter of the previous year. Gross income, in turn, recorded a gain of 37.1 % to €385.8 million, buoyed by the strength of the recurring banking business.

The more intense pace of growth in revenue compared to operating expenses lifted operating income by €212.9 million, 74 % higher than the same quarter of the previous year, thanks to the increase in the customer spread to 3.1 % for the quarter, and a 59.7 % gain in operating profit (operating revenue less operating expenses) and improvement in the cost-income ratio to 44.8 %, a full year-on-year reduction of 11.7 percentage points. 

Grupo Cajamar maintained its prudent management model, placing asset quality ahead of profits, and set aside €109.4 million in its income statement for provisions, writedowns and impairment allowances for financial and non-financial assets. Consolidated net profit nonetheless came in at €86.7 million and return on equity (ROE) was 6pp higher at 8.6 %.

The broadly diversified loan portfolio and sound management of non-performing assets brought the NPL ratio down 0.5 percentage points to 1.98 %, among the lowest of significant financial institutions in Spain. This improvement reflected the -19.5 % y-o-y drop in non-performing risks, after recording a decrease of €187 million, and a -45-2% decrease in net foreclosed assets, which were down by a total of €256 million from one year earlier. The NPL coverage ratio, meanwhile, moved 4.8pp higher to 75.4 %.

Commercial Activity

The Group's total assets ended the quarter at €60,132 million, 4.5 % lower than one year earlier owing to the Group having repaid in March 2024 the whole of its ECB financing. In turn, the total volume of funds managed stands at €98,906 million. 

These solid numbers in its commercial activity pushed the Group's customer funds under management up by 7.8 % year-on-year to reach €52,565 million, led by gains both in on-balance and off-balance sheet funds. Of note in on-balance sheet funds was the 95 % rise in term deposits over the same period of the previous year, boosting the Group's national market share of deposits to 2.72 %. Off-balance sheet funds, meanwhile, recorded a 30 % increase in investment funds, much stronger than the sector reading of 12.8 %. 

The loan portfolio displays diversified lending to households, the agri-food sector, large companies, SMEs and the public sector. Compared to the same quarter of 2023, performing loans grew 1.3 %, reaching €36,890 million. Of note here was that 46.3 % of new business lending went to the agri-food sector, 28.7 % to small and medium enterprises and 25.1 % to large companies. 

Customer Care

Between January and March, Cajamar was ranked number one in customer satisfaction amongst significant financial institutions, according to the Stiga consultancy, specialised in measuring, analysing and optimising the customer experience. 

Grupo Cajamar continues providing close, personal advising and services to its nearly 3.8 million customers and more than 1.7 million cooperative members, with its 5,184 professionals working in 1,000 branches and rural offices, some 43 % of which are in municipalities with fewer than 10,000 inhabitants and 31 % in towns of less than 5,000 residents. And it also makes available six mobile offices—roving vehicles— to deliver financial services in rural areas to customers in 43 towns of between 170 and 1,500 residents, largely consisting of elderly citizens. 

Likewise, it also provides financial services to its more than 1.1 million digital clients, 5.5% more than in the same period of the previous year, through its App, digital banking, and electronic banking, of which 666,000 are users from Bizum, 11.3% more than a year ago.

Solvency and Liquidity

Grupo Cajamar continues strengthening its solvency, improving its phased-in capital adequacy ratio by 0.5 percentage points to 16.2 %, with a noteworthy year-on-year increase of 4.5 % in eligible own funds. Its phased-in CET1 ratio likewise improved to 13.9%, well above the regulatory requirements, with a buffer of €822 million. 

The MREL ratio improved 3 percentage points to 23.3 %, surpassing the final requirement of 23.07 % set by the regulatory authority for 1 January 2025.

The deep and growing base of on-balance sheet retail deposits, combined with the €600 million in mortgage covered bonds issued in January, allow Grupo Cajamar to maintain a comfortable liquidity position, without having to rely on ECB financing. The available liquidity amounts to €16,010 million, 26.6 % of total assets, and easily meets the European regulatory limits, after an increase of 30.3pp over the year-earlier liquidity coverage ratio (LCR), which ended the quarter at 215.5 %, and a net stable funding ratio (NSFR) of 152.6 %. In addition, Cajamar has mortgage covered bonds issuance capacity of €2,275 million.

Sustainable Finance

In the first quarter of this year, in Paris the CDP environmental organisation distinguished the cooperative bank Cajamar with its ‘CDP Europe Awards’ for having earned the top ‘Leadership’ score of ‘A’ for Cajamar's corporate transparency and performance in climate change matters.