EUR 10.24 For Business Accounts Only

Bankia 4Q17 results: A weak set of results

 

4Q17 results: Net profit below consensus estimates

Bankia released its results both on a regulatory basis (including BMN since December 1st, 2017) and on a stand–alone basis for comparison purposes. The group obtained €505mn in 2017 net profit once deducted €312mn of net restructuring costs. BMN’s December contribution was zero. Bankia (ex–BMN) obtained a net profit of €816mn (+1.4%) in 2017 and €77mn 4Q17 (+5.9% yoy and –65.8% qoq) below consensus estimates (€94mn). Revenues behaved as weak as expected: net interest income declined –7.9% yoy and +0.9% qoq, to €476mn, falling short of the €1,950mn revised target; fees increased +0.5% yoy and+1.7% qoq to €214mn and trading income remained stable at €55mn on a quarterly basis. All in, total revenues amounted to €629mn (–-11.0% yoy and –16.2% qoq) also impacted by the contribution to the Spanish Deposit Guarantee Fund. Costs rose +6.3% yoy and +3.0% qoq, to €399mn, meeting the +0% year target although showing a spike in costs that may be due to costs related to the merger process. Pre–provision profit was €230mn (–30.5%yoy and –36.7% qoq). NPL ratio declined to 8.5% in December 2017 (from 8.8% in September 2017) while coverage stood at 53.6%. Including BMN, NPL ratio and coverage ratio amount to 8.9% and 50.8%, respectively. Total gross loans (ex–BMN) declined to €107.5bn (–2.8% yoy) while customer funds amounted to €119.3bn (+0.5% yoy). CET 1 fully loaded (once consolidated BMN) stands at 12.33% (12.66% including unrealised capital gains). The impact of IFRS 9 is –37bp (to 11.96%) or just –17bp once included the unrealized gains from the sovereign debt portfolio.