CaixaBank has presented this Tuesday in London to its new strategy for 2019 to 2021 with international investors and the media. Among the novelties is the reduction of the branch network, which is the largest in Spain, which changed from 4.461 to an area of 3,640 in 2021. The entity speaks of a close “more than 800 branch offices,” according to the document sent Tuesday morning to the CNMV. This figure represents the disappearance of the 18% of the network. The entity did not say at any time what would be the reduction of template on the 37,000 employees that has in these moments, even in their plans figure that will reduce 1.8% of their operating expenses.
The bank expects to increase 5% income and 3% expenses, so that the return on equity (ROTE) is expected to rise to 12% compared to 10% who expect to close this year. “This includes a gradual climb, but moderate, of interest rates”, said Jordi Gual, non-executive chairman of CaixaBank. If you do not reach this climb, the objective of profitability, fell to 10%. According to analysts, CaixaBank will gain about 2,700 million in 2021, if a plan is fulfilled. Until September 2018 has managed to 1.768 million. Mid session, the entity fell 1.5% in the Bag. Ford downplayed the fact: “it Is in line with other banks”, although it is the second entity with the biggest declines.
CaixaBank, as the rest of the banking sector, continues on its path of reducing costs via template, and offices, while downgrade provisions by the fall of the delinquency to the economic improvement. At the time, raises the investment in technology for its digital transformation up to 800 million annually. The higher income of this bank will arrive by the commissions services, insurance, payment services and pension funds, as well as the consumer credit and corporations. Therefore, Cortázar stated that CaixaBank “is not a bank, but a financial group”. Unlike previous years, the profitability of mortgages, which are affected by the low interest rates, will not be the great protagonist of the income. The entity does not intend to make purchases of banks or enter into other countries through acquisitions.
The entity has not completed the workforce reduction, while between 2011 and 2018 have left 14,000 employees of the bank with union agreements, and have entered the 6,000-after the acquisitions, according to the entity. In the press conference after the presentation, the ceo, Gonzalo Cortázar, dodged all the time to give details because it would open now the union negotiations. The chief executive denied that they were going to be 5,000 people, he also refused to go down the template in a 18% which is the percentage of offices that will close. “We have not defined a figure, we’ll open a negotiation that insurance that is satisfactory,” he summarized. Or even wanted to encrypt the amount of 10% of the total, to the questions of the press.
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CaixaBank is set the challenge of strengthening its “leadership” in Spain and Portugal for The test and trimming of the dividend CaixaBank wins 1.768 million through September, an 18.8% more
Disappearance of the offices small urban
What he said is that in order to maintain the rural network of offices (about 1,000 in total in a town of less than 10,000 inhabitants), “you will need the complicity of association to relax the conditions of the employees of these areas. If not, we will have to take measures that we don’t like”, he warned. CaixaBank insisted that the reduction is most relevant will be come by the office of urban simple, the more small, that is dedicated to mechanical operations, to increase the number of store, the offices open with a format similar to a trade and that will be focused on the personalized attention to the client with a schedule of opening more large and even sell products, such as tvs or phones. The entity will pass from the 120 store today to 600 in 2021.
CaixaBank claims to be the first commercial bank in Spain, both for commercial customers conventional as well as by the digital, where it says to have the leadership with 32% of the total. The entity continues to this digital transformation by admitting that 62% of its customers combine the regular use of the office with digital media and only 38% are exclusive to digital. Still today, the first reason to choose a bank is to the proximity of the branch”, says the presentation, and the goal is to transform their clients into digital users because they are more profitable by hiring more products. The entity also intends to expand the model of care for remote inTouch, reaching to 2.6 million customers in 2021, compared to the 600,000 current.
The bank raises the investment in technology for its digital transformation up to 800 million of annual
The plan does not contemplate increases in the volume of mortgages because “the cancellations are superior to the contracting of new loans. This situation is not related to the judgment of the Supreme or with the new rules of mortgage that prepares the Government,” has established that the banks take the tax on documented legal acts. “It is simply the behavior of the market, but we will try to continue being the market leaders, now with the credits at a fixed rate, looking for value more than volume,” said Cortázar. It does, however, claimed that it clarifies the situation of the mortgages with “rules accepted by the parties and the society”, but it is not stated that they were to raise rates by the new legislation.
Maintain dividends
The new roadmap of CaixaBank draws five major strategic lines: to offer the best customer experience; accelerate the digital transformation; – encourage a culture that is people-centred; to generate a compelling return to shareholders, while maintaining financial soundness, and to be leaders in responsible management and commitment to society.
Under these assumptions, the bank intends to maintain a policy of dividend attractive to investors, with a goal of ‘payout’ (percentage of profit allocated to dividends) by over 50%. They did not want to set in how much more they can raise the 50%, but clarified Cortázar that you won’t feel pressured “by supervisors after the stress test. We passed and it seems to be a criterion simplistic to look only in the capital ratio CET 1 fully loaded”, the highest quality, “to establish who is right or wrong”, responded to a question about the statements of Luis de Guindos, vice-president of the ECB. Guindos said that those who were below the 9% they had to raise capital and CaixaBank is at 9.1%.
The entity hopes to achieve this goal in a more mature phase of the economic cycle, with a forecast of the growthpercent of GDP for Spain and Portugal of around 2% annually in the next few years, and with a predictable rise in “very gradual” interest rates. There was No criticism of the Government or political instability: “What happens is within parliamentary democracies. It’s best to have Budgets, but can be extended. We do not believe that this situation is detrimental to the economy,” said Gual.
Even in the field of technology, CaixaBank wants to bet by the use of the blockchain, the artificial intelligence and robotics, as well as new methodologies of working that promote flexibility and improve efficiency.
In Portugal, the focus will focus on to continue to create value in BPI, consolidate the business model and improve profitability.
