CaixaBank once again proposes, as it did in 2018, to raise the bank's profitability to 12% of its tangible capital –ROTE, in jargon– within three years, at the end of the 2022-2024 strategic plan presented yesterday in Madrid . The arrival of the pandemic and the crisis that followed, with a brutal contraction of the economy in 2020 and a prolongation of the era of negative interest rates, were decisive for the plan to fail.
Now, despite the war in Ukraine and the rampage of inflation, CaixaBank formulates the same target of 12% again and is optimistic about its chances of reaching it after closing 2021 at 7.6%. In absolute terms, this goal would imply generating some 9,000 million of capital in the period, which would be allocated to dividends, although this figure includes an extraordinary action, also announced yesterday, such as the purchase of own shares for 1,800 million.
This practice, known as buyback in the stock market world, is a form of shareholder remuneration, since it implies that the entities withdraw their own capital from the market and amortize the shares, thereby increasing the profit per share and, normally, the share price. the remaining shares. The repurchase, entrusted to an investment bank, will be executed throughout this year.
Apart from this lever, the improvement in profitability has a few elements in its favour. In the first place, it is about to complete the adjustments to offices and personnel derived from the absorption of Bankia –the largest corporate operation in its history, in March last year– and it has a sharpened and oiled structure to sell more and, above all, , get a better return on your assets.
For that, it has the European Central Bank (ECB), which prepares the rate hikes, which has brought the Euribor from underground to 0.2%. CaixaBank forecasts that it will reach 0.3% by the end of the year, which sounds cautious, and that it will be anchored around 1.5% or 1.6% in 2023 and 2024. That is pure gold for its margin of interest because, as explained yesterday by Gonzalo Gortázar, CEO of the bank, the entity has plenty of liquidity and is not going to enter into any war to remunerate the liabilities, that is, the deposits.
It remains to be hoped, then, that nothing goes wrong and no more black swans appear. If Spain and Portugal grow at the rate predicted by the Government, the main international organizations and CaixaBank Research itself, the business and profits can take off, as foreseen in the strategic plan. Not only José Ignacio Goirigolzarri, its president, and the rest of the team believe it, but also the investors. Yesterday, after the presentation of the plan, CaixaBank shares rose 5.2%, well above the Ibex, which advanced almost 1.5% on the day.
CaixaBank insisted in its presentation of the plan on the lines that must make up any business management manual: the centrality of the client, the attraction of talent and others, more banking, such as multichannel or the commitment to technology. The tailwind and this focus on making the most of its position should make it possible to improve new mortgage production by 50% or boost consumer credit by 30%, among other objectives. In funds, where its position is already very strong, the goal is to increase market share by 70 basis points, above 30%.
CaixaBank hopes to get rid of surprises. It is focused on Spain and Portugal and says it feels comfortable with its network of 3,850 offices, good capillarity and presence in towns where it is the only entity. With an ERE of more than 6,000 people still flaming, it does not foresee new staff reductions either. “We have the offices and staff that we want,” Goirigolzarri said.
On the other hand, the president assured that the return of the headquarters to Barcelona, where it came from in 2017, is not considered: "Our presence in Valencia is indefinite, as we have already said other times." As for the management committee, made up of twelve men and only two women, the goal is for this situation to change over the years, so that this body reflects the diversity of society, "but meritocracy must lead to that happens," said Gortázar.
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