Solid and profitable growth

Bankinter Group closed 2018 with record profits. Net profit stood at €526.4 million and pre-tax profit at €721.1 million, up 6.3% and 6.5% year on year, respectively. One of the most notable aspects of the year was the RoE, which came to 13.2%, making Bankinter the most profitable listed bank in Spain.

Quality assets

The quality of its assets is also worth particular mention, with the total NPL ratio below 3% (specifically, 2.90%, less than half the sector average). This percentage drops to 2.84% in the case of Spanish businesses.

The foreclosed property asset portfolio dropped to €348.2 million in 2018, compared to the €411.6 recognised at the end of 2017. Average coverage at 31 December was 44.4%.

Total Group assets at the end of the year came to €76,501.5 million, 8.7% up on 2017, with loans and receivables of €55,469 million (+4.1%) and customer retail funds of €50,583 million (8.9%).

Capital adequacy (measured in terms of fully loaded CET1, or maximum quality capital) improved by 29 basis points compared to 2017, to 11.75%, which compares well with the rest of the bank and is comfortably above the ECB's regulatory requirements for Bankinter.

High liquidity

In terms of liquidity, at the end of 2018, the commercial gap came to €4,000 million, with a deposit-to-loan ratio of 93.8%, i.e. 320 basis points up on 2017.

Outstanding wholesale issues maturing in 2019 and 2020 come to €800 million in each year. To meet these maturities, the Bank has liquid assets of €10,900 million and can issue up to €6,500 million in covered bonds.

Growing margins

All margins grew in 2018. Net interest income came to €1,094.3 million (+5.%); gross operating income to €1,940 million (6.4%); and operating income to €936.4 million (+6.5%). Fee revenues totalled €450 million (+6.2%).

The performance of the main lines of business was as follows:

• Corporate Banking. This is the business line that contributed the most to the Group's gross operating income in 2018 (30%). The loan book, at 31 December, came to €24,000 million, of which €22,600 million corresponded to Spain (+3.2%). Thanks to the growing weight of transactional and relationship activities, fee revenues increased by 18%. The International Business now generates 27% of the gross operating income from the entire Corporate segment.
• Commercial Banking. Contributed 28% of total gross operating income. Payroll accounts at 31 December came to €8,317 million (+22%), whilst the residential mortgage portfolio totalled €2,532 million (+11%). Assets under management in the Private Banking segment totalled €35.6 million (+2%) and €21,600 million (also +2%) in Personal Banking, despite the adverse market conditions.
• Línea Directa. Contributing 22% of the Group's gross operating income, this company owned fully by Bankinter surpassed three million policies for the first time (+7.9%). Premiums issued contributed €853.1 million (+7%). The combined ratio at year-end came to 87.3% and RoE was 38%.
• Consumer lending. The number of customers at Bankinter Consumer Finance surpassed 1.3 million (+18%). Consumer commercial activities maintained a good pace throughout the year, with a balance of €632 million in new loans (+46%). The loan book at year-end 2018 was €2,000 million (+34%).
• Bankinter Portugal. Achieved double digit growth both in terms of funds (+17%) and loans and receivables (+12%); worth particular mention was the increase in loans to companies (+42%). All its margins also increased: net interest income by 13%, gross operating income by 14% and operating income by 73%. Pre-tax profit jumped to €60 million (+92%).