Results
In the first six months of the year, Grupo Cooperativo Cajamar continued to achieve remarkable growth in core banking revenue, backed by strong performance in customer funds under management and in performing loans. All the income statement margins show double-digit growth, contributing to an increase in capital adequacy and an improvement in efficiency, while also reinforcing the quality and diversification of the Group’s loan portfolio, lowering its risk profile and keeping its NPL ratio one of the lowest among the top Spanish banks.
The current interest rate environment has continued assist to the upward trend in net interest income, which is up 30.9% year-on-year, at €614 million. This increase, coupled with growth in other items such as dividend income and fee and commission income, has given rise to a 30% year-on-year increase in gross income, which came to €789 million, driven by strong core banking revenue and the revenues from loans to customers, which has risen 47.4%.
Supported by the faster pace of banking revenue growth, pre-provision profit comes to €429 million, 48.8% more than in the same half of the previous year. Over the same period, operating expenses increased by 12.9%, after the previous year’s bonuses for the Group's professionals were paid in the second quarter. Thus, operating result (operating revenues less operating expenses) increased by 37.1%, Return on Equity (ROE) grew 5.4 percentage points to 8.5% and the cost-income ratio improved by 6.9 percentage points year-on-year, reaching 45.6%.
Finally, consolidated net profit is €174.1 million, up 191.7% year-on-year, prompting a forecast of record profit at year-end, after allocating €220.9 million to provisions, gains/losses and impairment losses, of which €126.7 million are allocated to provisions and gains/losses, while the amount allocated to impairment losses is reduced by -38.1%.
Sales activity
Grupo Cajamar’s total assets stand at €60,911 million, slightly lower than at the end of the same period of 2023, owing to the repayment of the entire amount of ECB financing in the first half of 2024. Total volume of funds managed, meanwhile, rose above €100 billion for the first time, reaching €100.286 billion at 30 June.
Thanks to good sales performance, customer funds under management grew 8.4% year-on-year, to €54,660 million, reflecting a 6.3% increase in on-balance-sheet customer funds and a 19.5% increase in off-balance-sheet funds. The increase in balance sheet funds has brought a further increase in deposit OSR market share, which reached 2.8%. In off-balance-sheet funds, investment funds posted a remarkable increase of 32.1%, well above the industry average of 12.7% and above the increase in pension plans, which was 13.4%.
The diversified loan portfolio is distributed across households, the agri-food sector, large companies, SMEs and the public sector. Performing loans amount to €37,626 million, up 0.4%, with loans to companies up 3.9% year-on-year, despite the general decline in demand under the impact of European monetary policy. This is one of the factors driving the growth in the Group’s market share of loans, which stands at 3%, while lending to the agri-food sector has continued to increase, bringing the domestic market share to 15.7% and in some regions to more than 50%. It is worth noting that of the €8,084 million of new financing granted to companies and agribusiness, 43.8% has gone to the agri-food sector, 29.4% to large companies, 8.7% to SMEs and 18.1% to small businesses.
At the end of the first half, Grupo Cooperativo Cajamar is positioned among the significant banks with the lowest NPL ratio, namely 1.96%, and with a better NPL performance than the sector. This is attributable to the strength and quality of the Group's loan portfolio, now that the level of non-performing assets has been reduced to normal levels, with a significant -43.7% reduction in net foreclosed assets, down €214 million compared to the same quarter of 2023; and a -11.6% reduction in non-performing total risks, which are down €103 million. The NPL coverage ratio has held steady at 69%.
In this scenario, the rating agencies Fitch Ratings and DBRS have placed Grupo Cajamar's credit rating at investment grade.
Customer service
Of the significant Spanish financial institutions, Grupo Cajamar is the second best rated in terms of customer satisfaction, according to the consultancy firm Stiga, which specialises in customer experience measurement, analysis and improvement.
The 5,168 professionals employed by Grupo Cooperativo Cajamar's member entities provide tailored, personalised advice and service to their more than 3.8 million customers and 1.7 million cooperative members through their 991 branches and rural counters, 6 of which are mobile branches serving 43 small localities with fewer than 1,500 inhabitants.
At the same time, Grupo Cajamar's digital banking service (app and electronic banking) ranks top in Spain in availability to customers. This is the finding, based on June data, reported by the company AQMetrix, a digital banking performance and functionality benchmarking firm after evaluating more than 200 entities worldwide and 18 in Spain.
Capital adequacy and liquidity
Grupo Cajamar has improved its phased-in total capital ratio by 0.5 percentage points, to 16.2%, on the back of a 4.2% year-on-year increase in eligible capital. The phased-in CET 1 ratio has risen to 13.8%, well above the regulatory requirements, with a buffer of €792 million.
The MREL ratio rose 3 percentage points to 23.15%, exceeding the binding requirement of 23.08% set by the competent authority for 1 January 2025.
Thanks to growth in customer deposits and stability in its diversified wholesale funding sources, and with international investors showing a growing interest in the markets (€600 million of mortgage bonds issued in January), Grupo Cajamar has been able to maintain a comfortable liquidity position, without having to draw on ECB funding. Available liquidity amounts to €16,920 million, 27.8% of total assets, easily meeting the minimum levels set by European regulations, with a liquidity coverage ratio (LCR) of 223.3%, a net stable funding ratio (NSFR) of 152% and a loan-to-deposit (LTD) ratio of 81.5%. In addition, the Group also has mortgage covered bond issuance capacity of €2,213 million.
Cajamar Financial Centre
Last June, in the second quarter of this year, Grupo Cajamar’s central services in Almeria moved into their new operational headquarters in the Almeria Science and Finance Park, which brings together more than 1,500 professionals working in financial institutions and their subsidiaries and providers of innovation, technology and customer care services. The building has become a benchmark for modern, ecological and environmental construction and has been awarded an ‘A’ grade energy performance certificate and the Leed Platinum and WELL environmental and employee welfare certifications.