Bankinter | Bankia has presented its first quarter results (Q12019). We highlight the principal figures compared to the consensus: Interest margins: 526 M€ (-4,7% vs 502 M€ expected); Gross margin: 813 M€ (-13,3%; vs 814 M€ expected); Operational margin: 357 M€ (-16,6%; vs 355 M€ esperado); Annual net profit: 205 M€ (-10,8% vs -40 M€ in Q4 18 vs 196M€ expected).
The gains and losses account reflects: (i) the negative impact of low interest rates on the stock of credit – mostly referenced to the Euribor – and the elevated weight of mortgages on the balance sheet. (ii) the change of mix towards consumption and companies and the improvement in comercial activity are only partly compensating this effect and incomes have fallen -13.3%, (iii) the advances in efficiency after the integration of BMN in 2018 (-7.0% in operating costs) and (iv) the fall in risk costs to 14 pb (vs 18bp in Q418 vs 23 bp in Q118) which are accompanied by an improvement in the credit quality índices. Non-performing loans has fallen to 6.2% (vs 6.5% in Q418) with a coverage rate which has improved to 55.0% (vs 54.6% in Q418).
The capital ratio CETI FL remains above the sector average (12.54% vs 12.62% in Q418) and exceeds the bank´s target (~12.0%). The RoTE remains far from 8.0% at 6.7% (vs 5.7% in 2018 vs 7.7% in Q118).