Release Date: January 23, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Bankinter SA (BKIMF, Financial) achieved a record net income of EUR953 million for 2024, marking a 13% increase from the previous year.
- The company reported a strong return on equity of 18%, highlighting its profitability and efficient use of shareholder funds.
- Customer deposits grew by 5%, and assets under management increased by 22%, contributing to a 9% growth in total customer volumes.
- Bankinter SA (BKIMF) maintained a best-in-class cost-to-income ratio of 36%, demonstrating operational efficiency.
- The company's focus on technology investment has improved productivity by 37% since 2018, allowing each employee to manage EUR33.5 million of business volumes on average.
Negative Points
- Net interest income growth was modest at 3%, with a slight reduction in net interest margin quarter-on-quarter.
- The company faced a EUR28 million asset impairment related to the removal of intangibles, impacting overall financial results.
- Operating expenses increased by 6% in 2024, which, although below revenue growth, still represents a significant cost rise.
- The cost of risk remained at 39 basis points, with additional provisions for litigation processes anticipated in the future.
- Bankinter SA (BKIMF) anticipates some margin compression in the first half of 2025 due to the repricing of assets and liabilities.
Q & A Highlights
Q: Can you elaborate on the initiatives to accelerate the decline of deposit costs and the repricing of the corporate loan book?
A: Jacobo Diaz Garcia, CFO: We are shortening the duration of deposits and updating digital account pricing, which is reducing costs. Around 50% of the corporate loan book has already repriced, indicating a fast repricing speed compared to the mortgage book.
Q: What are the main drivers for the high single-digit growth in fees?
A: Jacobo Diaz Garcia, CFO: We expect strong growth in assets under management and custody, driven by economic activity in both corporate and retail sectors. This includes growth in investment funds, brokerage, and payment services.
Q: Are there opportunities for loan book growth in Spain, considering the potential market consolidation?
A: Gloria Ortiz Portero, CEO: We see growth opportunities in all markets and segments, particularly in corporate financing and mortgages. The market is stabilizing, and we expect to grow in both corporate and individual loan books.
Q: Could you explain the 20 basis point adjustment in market and operational risk, and does it include Basel IV impacts?
A: Jacobo Diaz Garcia, CFO: The 20 basis points are related to operational risk consumption due to increased income, not Basel IV. Basel IV is expected to have a 20 basis point negative impact in the first quarter of 2025.
Q: What are your expectations for the return on tangible equity and RWA evolution in 2025?
A: Jacobo Diaz Garcia, CFO: We expect to maintain high levels of return on equity, similar to 2024, above 15%. RWA growth in the fourth quarter of 2024 was due to seasonality and growth in corporate and consumer finance, which will stabilize in 2025.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
