Malaga’s banking group earned €260 million last year, an 88.9% increase, after setting aside €50 million to anticipate a possible economic downturn due to continued inflation
Unicaja Banco earned 260 million euros last year, which represents an increase of 88.9% compared to 2021. The financial group explains this profit increase by the increase in its ordinary income (interest margin increased by 2.9%, while net commission income revenues rose 7.3%). The reduction in administrative expenses also contributed to the improvement in the entity’s accounts, which declined by 8.2% in the year, reflecting the implementation of its restructuring plans – office closures and staff departures, which were completed in 100 % and 81%, respectively, in terms of what was planned – and the fruits that were gathered in the form of synergies. This led to an improvement in the efficiency ratio of 7.4 points.
Similarly, the entity also had to reduce its credit risk hedging efforts, which decreased by 20.8%. However, the financial group announced this Tuesday an extraordinary provision in the amount of nearly 50 million euros for the profit of the last quarter of 2022 in order to, as stated in a statement, “anticipate the possible deterioration of the economy due to the maintenance of high inflation.” This has resulted in the figures for the latter part of the year being lower than what had been predicted by the analyst consensus.
Not only did the interest margin (which experienced a strong increase of 11.5% in the last quarter with the increase in credit profitability supported by the European Central Bank interest rate hike), but also the commercial margin, to 1.54% , on top of the gross margin, which grew 4.5% year-over-year to 1,584 million.
Indisputable credit investments, ie loans to private individuals, rose by 1.8% to nearly EUR 34,500 million. Meanwhile, mortgage-backed financing rose 1.7% to 31,617 million. In 2022 alone, Unicaja Banca provided 10,049 million euros in new loans and credits, of which 4,313 million were mortgages to private individuals. The market share of mortgage formalisations rose to 8% of the national total.
If all this is the case on the side of credits granted to customers, on the side of deposits, i.e. money entrusted to the entity, these amounted to 90,081 million euros, which means an increase of 0, 3% in the fourth quarter. The total assets under management amounted to 98,178 million euros. In the last quarter of the year alone, time deposits increased by 11.7%.
In addition, the entity’s investment banking activity, i.e. its off-balance sheet activity, stands out: for example, the accumulated equity in investment funds at the end of the year amounted to EUR 11,249 million, growing 0.4% in the quarter, while pension plans totaled EUR 3,682. million euros in assets, representing an increase of 0.8% in the latter part of the year.
In terms of credit quality, the payment delay rate remained stable at 3.5%, while the volume of non-performing assets decreased by 9.6%, reflecting the reduction in the tax on foreclosed assets from sales. The coverage ratio with provisions for foreclosed assets is 64.1%, while that for doubtful assets exceeds 66%.
The bank’s solvency, i.e. the highest quality capital, is 13%, which means that it has a capital surplus above the capital required by the regulations for a value of 1,622 million euros.
Looking into 2023, the bank expects interest income growth of more than 15% and operating expenses to fall by between 2% and 3%, supported by pending cost reductions, figures that analysts value as favorable guides for the future.
Source: La Verdad
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
