Bankinter earns 286 million euros in the first half of the year, an increase of 45%, after consolidating its business in Portugal

At the close of the second quarter of 2016, Bankinter Group maintains the strengths on which the results of its business usually stand, as well as the solidity of its balance sheet and of its assets.

The details presented on 30 June already include the Bankinter Portugal turnover, after the conclusion on 1 April of the purchase of Barclays' Personal, Private and Corporate Banking businesses with which the institution operated on the Portuguese market.

Thanks to all of this, on 30 June 2016 Bankinter Group obtained a consolidated net profit of 286 million euros, and a profit before tax of 401.6 million, comprising increases of 45% and 44.4%, respectively, compared to the same period last year.

Without taking into account the badwill of the purchase operation of the retail network of Barclays in Portugal, the net profit of the bank would stand at 203 million euros, an increase of 2.9% compared to June 2015; and a profit before tax: 286.8 million, a 3.2% increase.

The return on equity increases to 12.9%, due to the positive effect of the badwill of Portugal. Excluding this extraordinary effect it remains at 10.5%, the highest in banking.

Similarly, Bankinter maintained the quality of its assets, as well as some of the highest solvency levels in the industry.

Regarding the former, the non-performing loans rate of the bank stood at 4.25%, compared to 4.43% a year ago, a rate that continues to be less than half of the sector average, which stood at 9.8% in May. And all of this came after taking on the non-performing loans of the subsidiary in Portugal, substantially higher - in relative terms - to those of the Group. Compared, in terms, to the previous quarter, the non-performing loans ratio would have stood at 3.75%.

With regards to solvency, Bankinter has a CET1 fully loaded capital ratio of 11.4%, which remains high after the purchase of Portugal, and substantially higher than regulatory requirements.

Similarly, the bank has improved its financing structure, strengthening the ratio of deposits to loans up to 87.1%, compared to a figure placed at 81.1% a year ago; and it has a liquidity gap of 7.1 billion euros, 23% lower than at second-quarter end in 2015.

Similarly, maturities of wholesale issues pending until 2019 amounted to 3.6 billion euros, for which the bank has 9.6 billion in liquid assets in order to cover and a bond issuance capacity valued at 6.1 billion.

Strength of the margins.

Despite the environment of rates, the net interest margin of Bankinter proved steady and amounted to 463.6 million euros on 30 June, with 7.3% growth compared to the previous year which, excluding Portugal, stands at 3%. All this is backed by greater volumes, both in terms of investment and resources, and an improvement of the product mix.

With regards to the gross income, at the end of the second quarter it amounted to 835.5 million euros, 3.6% more than a year ago, and it remains constant excluding the acquisition of Portugal.

In terms of the margin before provisions, at the close of June 2016 it amounted to 406.7 million euros, 4.6% lower than twelve months ago, due to an increase of expenses resulting from the investment in new strategic businesses, the improvement of the technological systems, and expenses resulting from the integration of the business of Portugal. Nonetheless, the cost/income ratio of the banking activity with depreciation stood at 44.5%, and at 42.5% excluding Portugal.

Bankinter closed the second quarter at 65,890.6 million euros with regards to the total consolidated assets of the balance sheet, up 13.7% on June 2015.

Similarly, the volume of credit to customers amounted to 50,238 million euros, 16.5% more than a year ago. Customer retail lending grew by 27.5% in the year, reaching 41,513 million euros. And with regards to off-balance-sheet managed resources, total assets of 22,413.3 million euros were accumulated, an increase of 11.7%.

Nonetheless, excluding the Portugal data, both sections of the balance sheet, resources and credits, maintained, by themselves, the growth trend of previous quarters.

Thus, credit to customers - excluding Portugal - has once again shown signs of strength, reaching 45,808.8 million euros at the close of the second quarter, 6.3% more than a year ago. This figure contrasts with an economy-wide 3.7% drop in credit to companies and families, according to current data published by Banco de España. In the Corporate Banking specific business, the credit growth - excluding Portugal - stands at 7.8%. Furthermore, the wholesale funds have experienced a much more significant rise: an increase of 18.4% with respect to June 2015, amounting to 38,545.8 million euros.

A determined customer business that is growing.

This good progress of the bank's customer business - which now, after consolidation of the data for Portugal, will be extending the perimeter of its activity - has been significant in all the main strategic sectors: Private Banking, Corporate, Insurance and Consumer, among others.

In Private Banking, the customer managed assets came to 28,500 billion euros, a 7.5% increase with respect to the previous year and despite experiencing a drop in value of 1,400 million due to the market effect. Similarly, Bankinter maintains its privileged leading position in the SICAV ranking, with 469 companies, 14% more than June 2015, and a market share of 13.9%, well above what would correspond to its size.

In the area of Corporate Banking, the credit investment figure is especially significant once again, with a portfolio that, without taking into account the consolidated data for Portugal, comes to 20,400 million euros at the close of June, resulting in a 7.8% organic growth on the previous year's figures and a market share of 6% for new operations.

In terms of Línea Directa, the data maintains the growth trend, with a total of 2.48 million policies, 7.2% more than last year. Especially notable along these lines is the growth in home insurance: an increase of 13.9%. Línea Directa maintains the high return of the business, with an ROE of 29.7%, and the best combined ratio in the market, at 90%.

The Consumer business is also noteworthy, operated through the subsidiary, Bankinter Consumer Finance, to which the bank has been committed now for a number of quarters. From the main indicators, notable figures include a year-on-year growth of 49% in the total number of customers up to 804,000 at the end of the second quarter, and an investment of up to 859 million euros, 70% more than in June 2015.

In the commercial sector, the data for some of the bank's main commitments stand out for the types of products, such as mortgages and the salary account. Thus, new home mortgages maintain their upward trend of the previous year, with a new production volume in the second quarter of 648 million euros, compared with 543 millions that the bank generated during the second quarter of 2015. And with regards to the portfolio of salary accounts, the balance stands at 4,871 million euros, 26% more than a year ago.

The bank's activity in terms of its online business deserves a special mention, as well as the digital transformation process for its customers, which is reflected in the numbers. For example, 33% of its customers are now completely digital; 60% are mixed, meaning that operate both through traditional and online channels; and just 8% operate through the branches or by telephone banking only.

The bank's successful digital activity is also seen in the number achieved by the COINC online platform, which now has 98,000 customers and deposited assets of 1,150 million euros, 48% more than in the first half of 2015.

Highlights and report

Half Year Finacial Highlights

(*) From banking activity, including amortizations.