CaixaBank SA (CAIXY) Q3 2024 Earnings Call Highlights: Strong Lending Growth and Robust Capital ...

GuruFocus News
4 min read

In This Article:

  • New Lending: Up 20% year-to-date.

  • Wealth Management Balances: Increased by 9% year-to-date.

  • On-Balance Sheet Deposits: Grew by 5.5% year-to-date.

  • Net Profit: Solid results with significant capital generation.

  • Interim Dividend: Announced at EUR1.1 billion, 40% of the first half-year result.

  • Business Volume: Up 4.5% in nine months.

  • Consumer Lending: Grew by 5.9% year-to-date.

  • Mortgages: Flat for the year, with two consecutive quarters of growth.

  • Return on Tangible Equity (BPI): 20%.

  • Cost Income Ratio (BPI): Below 40% at 39%.

  • Return on Annual Equity: 16.9%.

  • Capital Generation: 171 basis points year-to-date.

  • Net Interest Income (NII): Up 13.6% year-to-date.

  • Customer Spread: Down by 15 basis points to 343 basis points.

  • Wealth Management Revenue: Up by close to 12% year-on-year.

  • Protection Insurance Growth: 11% year-to-date.

  • Cost of Risk: 28 basis points on a 12-month trailing basis.

  • NPL Ratio: 2.69%.

  • Liquidity Coverage Ratio: 213%.

  • MREL Ratio: 28.33%.

  • CET1 Ratio: 12.24%.

Release Date: October 31, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • CaixaBank SA (CAIXY) reported a 20% increase in new lending, indicating strong customer activity and growth potential.

  • The bank achieved a 9% increase in off-balance sheet wealth management balances and a 5.5% rise in on-balance sheet deposits, showcasing robust growth in customer funds.

  • Net interest income (NII) stabilized quarter-on-quarter, defying expectations of negative growth, and is projected to exceed EUR 11 billion for the fiscal year 2024.

  • CaixaBank SA (CAIXY) announced an interim dividend at the top end of its range and received approval for a fifth share buyback, reflecting strong capital generation and shareholder returns.

  • The bank's asset quality remains strong, with a non-performing loan (NPL) ratio of 2.69%, well below the industry average in Spain, and a comfortable NPL coverage of 71%.

Negative Points

  • Despite strong new lending, the overall loan book growth remains limited due to a low growth environment and significant amortization processes.

  • The competitive landscape in Spain remains intense, particularly in the mortgage and business lending sectors, which could pressure margins.

  • The bank faces potential challenges from the proposed extension of the special banking tax in Spain, which could impact future profitability.

  • CaixaBank SA (CAIXY) has a high proportion of interest-bearing deposits indexed to overnight rates, which may lead to volatility in funding costs as rates change.

  • The recent floods in Valencia could have an impact on the bank's operations and potentially increase costs related to insurance claims and customer support.

Recommended Stories