By opening a new roadmap, CaixaBank aims to exceed 16% profitability in 2027 in the scenario of falling interest rates, which they will fight by stepping on the accelerator to attract customers and increase business. The 2025-2027 strategic plan foresees 4% annual growth in the main business areas (credit and customer resources), attracting 800,000 net customers and distributing 50% to 60% of the profit to investors through dividends. Excess capital generating returns above 12.5% CET1 through dividends or share repurchase programmes.
Its estimates include the impact of the tax, which the Government wants to expand similar to what has been experienced in the last two years – close to 500 million each year, meaning 1,500 million over the course of the plan. If the tax is reduced, “the annual profitability will be a little more than 1 percent. If we are talking about more than 15 percent, we talk about more than 16 percent,” the bank’s CEO Gonzalo Gortázar said during the presentation this Tuesday. road map.
The banker once again attacked a tax that “does not seem to us to be justified and does not appear to increase growth. It will be an impediment because it is rather a tax on credit,” he added, inadvertently exploring whether it could improve the agency’s fiscal goals if it flounders in Congress.
CaixaBank rules out mergers and acquisitions in the new strategic plan. “Doing it organically and clearly isn’t going well right now, the size we have is more than enough.” he said, and declined to explore transactions that would complement the presence in areas where it might be less represented. He steered clear of participating in a potential sale of Novobanco or BCP, saying “Absolutely not” for Spain and Portugal.
One of the keys to the strategy is to increase the pace of attracting and creating business, undertake multiple business initiatives and maximize technological advances to compensate for the tightening of margins due to the decline in rates. To this end, the bank will invest 5,000 million (1,000 million extra compared to its usual programs) in digitalization and innovation over a three-year period and plans to improve its commercial and service capabilities with the help of productive artificial intelligence and technology. We are renewing channels and technological infrastructures. In parallel, it plans to recruit 3,000 young people, most of whom have technical profiles, to undertake this transformation.
While the main financial objectives include maintaining revenue despite the decline in interest rates, it is estimated to reach 16,000 million in 2027, compared to 15,500 million when it will close in 2024. Commissions are expected to increase in single digits. simple half year and precisely due to new investments, costs increased by 4%.
In the business, it will seek to increase managed volume by 4% annually, with similar expansions in both its credit side and managed customer resources. Its intention is to reduce bad debts to 2% from the current 2.7%, maintain a reserve bank covering 70% of bad debts, and keep the efficiency ratio below 40%.
It is scaling back its solvency target from 11-12% to 11.5-12.5% and has pledged to invest excess capital above that threshold between share buybacks and dividends to boost investors’ returns (CET1 12% in September, was 2). The dividend payment policy remains at 50-60%, but the threshold at which excess resources will be allocated to reward the investor increases from 12% to 12.5%.
Gortázar announced the increase in the interval when the Bank of Spain imposed a counter-cyclical buffer on the sector, and refused to estimate the expected total remuneration for the shareholder over the three-year period, unlike the previous plan in which the bank had committed 9,000 million. Thanks to record results with rates, this figure will later increase to 12,000 million. The market is evaluating numbers between 10,000 and 12,000 million where this distribution could be realigned.
His reluctance to give a figure was justified by the change in stage where today’s economy offers opportunities to grow in business and invest capital in it, and where the ultimate goal is to deliver better results and therefore better remuneration to shareholders: “I don’t do it because we are now seeing growth and our profitability is already above the cost of capital and therefore we are trading above book value,” he elaborated. “This means that there was also a big problem three years ago because when traded below, any euro inside the bank was worth less than outside (…) Now it is much more profitable to grow and support growth than to expand. Distribute capital,” he added.
One of the shareholders is the State, which holds 18.1% of the bank’s capital through FROB and has already foreseen that its duty is to maintain its capital share and thus will sell any package of securities in excess of its next participation share. Share buyback plans initiated by the bank. The “La Caixa” Foundation controls more than 31.2% of the shares.
The new roadmap comes after achieving the targets set in the 2022-2024 plan proposed after the merger with Bankia. In this projection, it was proposed to double the profitability until the ratio calculated on tangible equity capital (RoTE) reached 12%, and last September, this parameter was proposed to reach 16.9%; but it also improved its default forecasts – remaining at 2.7% compared to the 3% it aims to settle this year.
The productivity rate reached 39.2% in September; The challenge was to reduce this ratio from 58% to 48%, and the investor fee increased the commitment to be paid between ordinary dividends and through share buybacks from €9,000 million to €12,000 million.
Speed up work
It is stated that with the change in the monetary policy of the ECB, it has accelerated its activities by aiming to keep the RoTE above 15% on average in the three-year period and to exceed 16% at the end of the strategic plan. His forecast is to accelerate the business by growing by 4% in a scenario where he predicts rates will be around 2%: this target doubles the 2% increase achieved in the now-concluded strategic plan, as was the case in December. 2015-2018 road map.
In 2019-2021, expansion reached 6% as funding increased rapidly thanks to the liquidity lines used by the ICO to help companies and freelancers face the Covid crisis. To move operations faster, it will implement different tools and business actions, many of which are based on technological and digital innovations and improvements, and will invest $5,000 million in their development.
It wants to export the hybrid manager model of inTouch offices to its entire network so that all branch employees are equipped to work remotely or hybridly, will increase its expert manager team and incorporate productive artificial intelligence for greater efficiency in contracts. Customers. At Imagine, it will onboard remote executives for high-value customers and redesign and modernize its web channel and applications to attract new traffic and customers.
The ultimate goal is to improve activity. By business type, it aims for a 4% increase in credit; this was only 0.5% in the strategic plan to close this year, or 1.5% the year before; and will exceed 3% of the currently closed roadmap in customer resources.
In financing, it hopes to increase its mortgage portfolio by 2 percent, its loan stock in companies by 5 percent and consumer loans by 6 percent. Resources under management will focus on asset management, where a 6% growth is expected, with a 3% increase in customer deposits.
Its business ambition is based on the fact that it sees better prospects as loans begin to rise following massive deleveraging by families and companies over the last 15 years. It also sees opportunities in demographic growth (it expects a 1% annual increase in population resulting from migration), improving life expectancy and opening up job opportunities through the energy transition.
It will tackle connectivity and loyalty programs to expand its balance sheet and customer base, which today has 18 million users in Spain and a 36.6% market share in direct debit payrolls.
Plans to expand alliances to maximize opportunities in consumer credit partnersFor example, they implement special solutions for different segments such as vehicle manufacturers and young people. In wealth management, where it controls 29.5% of the national market share, it will promote low-cost digital tools for individual customers and enrich the catalog, among other initiatives.
