Bankinter expects to grant 700 million euros in new credit in Portugal in 2016
The bank plans to double its Portuguese business in three years and achieve 10% of the Premier and Private Banking market, as well as multiplying its Corporate Banking activity by four and its mortgages by seven.
Bankinter's chief executive expects to repeat the Group's successful organic growth model in Portugal.
Bankinter comes to Portugal with ambitious plans for growth and long-term permanence. This was reiterated today in a press conference held in Lisbon by both the bank's chief executive officer, Maria Dolores Dancausa, and the country manager for Portugal, Carlos Brandao. The objective of the bank's planned strategy is to promote the growth of the Barclays retail business of which they took effective control on 1 April, with a firm commitment to increasing the financing available to Portuguese businesses and families.
Private Banking, Premier Banking and Corporate Banking will be the main pillars on which the bank's major push in Portugal will be based. It is an ambitious plan with which the company expects to double its current market share in Portugal by 2018. The challenge it has set itself in the Premier Banking and Private Banking businesses is to reach 10% of the market share by 2018, compared to the 6% and 5% respectively they are starting from with the portfolio of acquired business. Another significant goal for Bankinter is to multiply its share of the Corporate Banking business fourfold to 4%, and the granting of new mortgages sevenfold to reach a market share of 7% in three years.
In 2016, the bank is looking for to attract 15,000 new customers, to grant 700 million euros of new credit, mostly to companies and in mortgages, and to increase customer resources by 900 million euros.
In terms of the bank as a whole, Bankinter hopes to make the Portuguese business its main territorial area in terms of its contribution to the Group in income, efficiency and profitability. Specifically, the objective set by Dancausa is for Bankinter's business in Portugal to become, within a reasonable time, 15% of the Group's balance sheet and income, compared to the current figure of 8%. Likewise, she expects the Portuguese branch to be showing a return on invested capital of more than 10% by 2020.
“We have arrived with an ambitious growth plan and a firm commitment to promote the financing of Portuguese companies and families from the outset”, stated María Dolores Dancausa, Bankinter's CEO.
Both the banking and the life insurance and pension fund businesses acquired from Barclays –the latter managed by Bankinter Life Insurance in alliance with Mapfre– “are excellent platforms for promoting the internationalisation of the bank and taking advantage of the enormous growth opportunities offered by the Portuguese market", Bankinter's top executive emphasised. This is a country the bank has had in its plans for some time; its economy is on the road to recovery and it has a financial system with greater margins than that of Spain and it is well advanced on a consolidation and restructuring process.
Within the framework of the bank's strategy, the chief executive expects Bankinter to be able to replicate the successful growth model it has developed in Spain. “Bankinter has demonstrated that it knows how to move forward in a crisis context. In the last five years we have been able to double the number of mortgages granted, to double the assets managed in Private Banking, to increase by 45% the volume of customer deposits, and raise the business credit portfolio by 29%. This is a successful organic growth story that we can transfer to Portugal, taking advantage of our huge amount of ‘know-how’ in Private Banking and Corporate Banking and our leadership in Digital Banking to grow the business in the Portuguese market”, María Dolores Dancausa stated.
For his part, Carlos Brandao, Bankinter's country manager in Portugal, declared that “we have a highly regarded team that has made a tremendous effort to speed up the integration process and to prevent this transition period up to the effective purchase by Bankinter having more than a minimum impact on the business of our Portuguese customers”.
Regarding objectives, Brandao pointed out that “we aspire to become a benchmark company in Private Banking, Premier Banking and Corporate Banking and to do this we will strengthen cross-sales and reactivate the business with large companies and SMEs. In parallel, are going to make big effort to improve the efficiency ratio”.
As regards the values Bankinter wishes to bring to Portugal, it is necessary to emphasise the four that are essential: the already mentioned experience of getting around moments of economic crisis; the strict culture of credit risk control practised by the bank; constant innovation as a pillar of growth, and the promotion and retention of talented professionals.
With the completion of the purchase of Barclays' business, for which Bankinter has finally paid 86 million euros, the bank has taken effective control of a business with a credit portfolio of 4,473.2 million euros; 2,507.8 million euros in managed assets off balance sheet; 2,530.8 million in deposits, a network of 84 branches, 930 employees and 173,000 customers, of which 19,400 are companies. With the integration of this business, the company has increased its principal operational magnitudes and its balance sheet by between 8% and 27%.
“The impact of the operation on Bankinter's balance sheet and income statement and its capital and liquidity situation is very limited and perfectly assumable”, Dancausa pointed out, adding that it creates value for Bankinter's shareholders from the very start of the operation.
In the case of the life insurance and pensions business, the final purchase amount was 75 million euros, signifying a PER ratio of 5.9.