At 30 June, Grupo Cooperativo Cajamar has a consolidated net profit of 44.3 million euros, 25.1% more than for the same period of the previous year, thanks to net interest income of 292.8 million euros, up 2.8% year-on-year. The gradual reduction of interest rates on new term deposits and the steady flow of savings into sight deposits and mutual funds has resulted in a decrease in finance costs in an environment that continues to be marked by historically low interest rates.
Added to this is the positive performance of fees for the marketing and management of mutual funds, insurance products, pension plans and consumer finance, which have grown 39.38%, cushioning the fall in fees from basic services to customers, which continue to decline.
Of particular note in this respect are the good results from the strategic agreements with GENERALI, TREA and CETELEM, which are driving growth in new production of life insurance policies and pension plans, mutual funds and consumer loans.
Recurring gross income, that is to say, gross income net of extraordinary gains or losses on financial assets and liabilities and the contribution to the Education and Promotion Fund, is up 8.4% at 458.5 million euros. This result, combined with the 3.5% year-on-year decrease in operating expenses, due mainly to containment of staff costs and general expenses, leads to an improvement in the recurring cost-to-income ratio, which is down 8.06 percentage points at 64.93%, and an increase in recurring net operating income, which is up 40.8% year-on-year. All this brings the return on equity (ROE) to 2.96%.
Meanwhile, the NPL ratio continues its gradual downward trend, falling 1.83 percentage points compared to the previous year, to 12.38%. The NPL coverage ratio stands at 44.32%, 2.25 percentage points higher than last year (42.07%). Non-performing assets have fallen 713 million euros in the last four quarters; in particular, NPLs are down 649 million euros, or 14.3%, year-on-year. The commercial management of foreclosed assets also shows a positive trend, with a 68% increase in sales. The major effort to build up impairment provisions has also continued and the improvement in results has been used to reinforce coverage.
Improved capital strength and ample liquidity
In the second quarter of 2017, Grupo Cooperativo Cajamar has improved its solvency position and maintains a comfortable liquidity position. The phase-in capital ratio stands at 14.46%, 2.88 percentage points higher than in the first semester of the previous year. The sharp increase in the total capital ratiois mainly attributable to the issue, on 31 May, of 300 million euros of subordinated debt, which counts as Tier 2 capital. The phased-in CET1 ratio, which comprises the highest quality capital, rose to 11.59%, while the fully-loaded CET1 ratio reached 11.38%, easily meeting the supervisor’s requirements.
At the same time, the Group maintains 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) is substantially above the industry average, standing at 375%, while the net stable funding ratio (NSFR) is 116,5%. The loan-to-deposit ratio (LTD) has improved to a comfortable 107.75% (from 109.64% by last 31 December), reflecting the composition of the Group’s balance sheet, with a solid base of retail depositors, whose on-balance-sheet funds have grown by more than one billion euros (+4%) since the start of the year.
Positive business performance
While the exposure to real estate developers continues to decline, dropping 18.5%, the volume of performing loans to customers is up 2.9% at 27,505 million euros, with a continued focus on lending to the strategic sectors (agribusiness and SMEs).
Grupo Cooperativo Cajamar thus confirms, once again, its role as a leading provider of financial services to the agribusiness segment, thanks to its broad range of specialised products and services for agrifood cooperatives and companies and its commitment to research and knowledge transfer through its experimental facilities, network of university chairs, publications, and training schools for cooperatives. For SMEs, the Group has continued to develop and promote new high value added services and activities (international platform, retail platform, state subsidies platform and franchising platform) and tailored products (Credinegocio, Credipyme, Crediagro and Agropymes). It is recognised for the quality of the service it provides, its customer knowledge, and its closeness and accessibility, through its extensive branch network.
Total assets are up 0.1% at 39,943 million euros. Highlights include customer resources under management, with year-on-year growth of 5.8%, reaching a total of 30,094 million euros, and off-balance-sheet funds, which are up 32.8% at 3,736 million euros. All this has helped Grupo Cooperativo Cajamar continue to gain market share and improve its position in the ranking of major institutions in the Spanish financial system, currently placing 8th in total assets and 11th in business volume.
Lastly, the Group continues to pursue its strategy of opening branches in regions in which the agribusiness and service sectors have a strong presence. In the first half of this year it opened two new branches in the towns of Breña Alta and Arona-Playa de los Cristianos, both in the province of Santa Cruz de Tenerife. As of 30 June 2017, it has a network of 1,090 branches and 5,743 employees in 42 provinces.