Write-downs take 80pc of CaixaBank’s profits, push core capital to 13pc

BARCELONA | CaixaBank reported Friday a poor attributed January to March net income of €166 million as a result of provisions enforced by the Spanish government, set to clean up the balance sheets of the country’s banking sector. For the Catalan entity, the figure means an 80.1-percent cut down comparing to the first quarter of 2011 and bears the scars of large write-downs of €3.735 billion.

CaixaB ank said that, as a consequence of the portfolio restructuring, it has significantly increased its solvency with a 13 percent core capital and its liquidity has improved to 42.489 billion.

“During the first six months of 2012, CaixaBank recorded high levels of allowance coverage to comply with the level required under Royal Legislative Decree 2 of February 2012 (€2.436 billion), along with €300 million for the partial impact of Royal Legislative Decree 18 of May 2012 (estimated at €2.102 billion to be covered by June 2013),” the bank explained in a press release.

During the first half of 2012, losses due to the impairment of financial and other assets totalled €1.9 billion, 36.4 percent more than on the same period for 2011. In the first six months of 2012, CaixaBank had a net operating income of €1.848 billion, an increase of 12.3%. CaixaBank noted it had maintained income levels with a gross margin figure of €3.414 billion, while at the same time reducing costs by 11.6%.

The group’s attributable own funds total €18.172 billion, with a surplus of €7.64 billion over and above the legally required minimum.

CaixaBank’s non-performing loans ratio stands at 5.58 percent, and it continued to compare favourably with the average figure for the financial sector as a whole in May (8.95%). The allowance coverage ratio stands at 60% (137% if mortgage guarantees are taken into consideration). By segment, the non-performing loans ratio remained at significantly low levels for individuals (2.15%) and businesses (3.99%), if developers are not included.

The “la Caixa” group said it has strengthened its position in the Spanish market, with an increased market share of 16% in managed salaries, 13.8% in pension funds, 23% in self-employed accounts, 11.1% in mortgages, 11.8% in consumer loans, 16.8% in factoring and confirming, 10.3% in deposits, 12% in investment funds, 16.4% in pension plans and 17.5% in savings plans.

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