The chairman of Bankinter describes 2017 as an exceptional year paving the way for future growth

In his speech in the Annual General Meeting of Shareholders held today, Bankinter chairman, Pedro Guerrero, pointed out that 2017 was an excellent year that paved the way for growth in the near future. Last year’s profits were ‘once again, for another consecutive year, an all-time record for Bankinter’. Bankinter Group’s pre-tax profit amounted to 495 million euros in 2017. This adds up to a 20% increase, without taking into account the extraordinary accounting effect resulting from the acquisition of Barclay’s outfit in Portugal in 2016.

Bankinter’s chairman announced that, thanks to its increased earnings, the group will be able to distribute 247.6 million euros in dividends against 2017 profits.

This means a 24% increase in the dividend Bankinter will pay out to shareholders, with respect to the dividend it distributed last year. As stated by Pedro Guerrero, this dividend (to be paid in cash) marks yet another year in which Bankinter will use 50% of its earnings to compensate shareholders. It is ‘compensation fitting for the earnings we have obtained with a 50% payout that, at the same time, ensures that we will preserve capital and maintain an appropriate level of solvency’.

Furthermore, the final dividend pending payment against 2017 profits will be distributed on 29 March, after shareholders in the Annual General Meeting approve the related payout. Bankinter shareholders will receive 0.09394111 euros (before tax) per share. This final dividend will be included amongst the three ordinary dividend payments against 2017 profits which Bankinter has made since March of last year.

With regard to business performance, Pedro Guerrero pointed out ‘growth in all individual and legal entity business segments, with increased market share all around’, with no extraordinary effects on earnings, as well as other aspects, such as the outstanding performance of Línea Directa and the successful integration of Bankinter Portugal.

As for share price performance, the chairman affirmed that Bankinter is ‘the bank whose share price increased the most in value among the 40 [banks] listed on the Euro Stoxx 600’ in the five-year period spanning from January 2013 to December 2017. Last year, the Bankinter share registered a notable 7.4% increase. 

Furthermore, in the first two months of 2018, Bankinter had the best-performing share price on the IBEX 35, increasing in value by 11%.

The chairman also mentioned that ‘we have been creating jobs for five years in a row’ and that the banking group's headcount stood last year at 5,486 people, ‘with a net increase of 100 people’ on top of the 379 new personnel hired in 2016.

Five years of sustained growth.

The chief executive officer of Bankinter, María Dolores Dancausa, highlighted that the record earnings obtained by Bankinter Group ‘come on the back of five consecutive years of sustained growth’, with ‘an annual growth rate of over 30% from 2012 to 2017’.

During her presentation, she also mentioned the balanced and very promising arrangement of the group’s four business lines in Spain, along with Bankinter Portugal.  These pillars are corporate banking, retail and commercial banking (each of each contributed around 30% to gross operating income), Línea Directa and consumer finance. Regarding corporate banking, the chief executive officer reiterated that ‘in the last seven years, across the financial system, investments in companies have decreased by half, while in Bankinter, during this same period, it has almost doubled’.

In addition to the four business lines in Spain, there is Bankinter Portugal, whose loan book increased by 6%, amounting to 4.8 million euros, ‘with particularly significant growth in corporate lending, up 21%,’ according to María Dolores Dancausa.

As relates to challenges faced by Bankinter, she underscored three amongst several challenges in the financial system: regulations, high competition in the financial world and technology. With regard to technology, she stated that ‘differentiation amongst peers will depend on how we use technology and our ability to transform our models and harmonise the transformed traditional model and the new digital native models, because both will persist, albeit in a different financial industry as we know it’. She added that Bankinter’s technological gap in this regard is smaller because of its investments in technology over the years.

Going forward, María Dolores Dancausa assured that Bankinter has a number of strengths on which to build in order to overcome the challenges it is facing, such as its best-performing share price amongst listed Spanish banks, measured by its return on equity, as well as its high level of solvency, the lowest non-performing loan ratio in the financial system, its high ability to adapt to its environment and a strong identity as a ‘cohesive group that has grown because of innovation, and not acquisition, with a unique culture and stable reference shareholder throughout its 53 years in existence.

In view of all these strong points, her response to all those predicting the end of the banking system as a result of ‘the combination of fintech and advanced technology’ or the numbered days of medium-sized banking, was that ‘those predictions will never come to pass’ in Bankinter.

In addition to the year’s dividends, all the resolutions set out in the agenda of the Annual General Meeting of Shareholders were also approved. These included the approval of the annual accounts; the confirmation of Teresa Martín-Retortillo, who had been co-opted as an independent external director; and the re-election to the board of the company, Cartival, S.A.

Shareholders also approved the proposal to raise the maximum number of board members from ten to twelve. Nonetheless, this new limit does not mean Bankinter will name new directors in the near future, but rather that a new board member selection process will commence in order to be considered by shareholders in the next annual general meeting.