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Goirigolzarri: “Bankia has turned into a growth story”

11 October 2017

Category: Corporate

José Ignacio Goirigolzarri, executive chairman of Bankia, during his speech at the Spanish Confederation of Managers and Executives (CEDE).

  • The bank has increased consumer lending by 20% in the last 12 months and has grown its market share of mutual funds and card revenue by 14 basis points since the start of the year
  • One in ten new customers does business with the bank exclusively through digital channels, while sales through these channels already account for 16% of the total
  • Goirigolzarri says that the lifting, at the end of the year, of the restrictions imposed under the Restructuring Plan “will open up new business opportunities for us”
  • Bankia is working to continue to be “the most efficient, the most solvent and the most profitable of the large banks” in Spain, which is “the way to create value for all our shareholders and help repay the state aid to taxpayers”

Bankia's chairman, José Ignacio Goirigolzarri, declared that the bank "has finally completed a successful restructuring story" and is now embarking on "a growth story". This growth will come from two sources: organic and non-organic.

During the third quarter of the year, net customer growth exceeded 14,000 new customers per month, compared to somewhat over 11,000 in the first half.

José Ignacio Goirigolzarri
Executive chairman of Bankia

According to the bank's chairman, the organic growth will be driven by two factors. The first is "an improvement in customer satisfaction", "which has enabled us to strongly increase our market shares in value-added products, both in the Individuals segment and in the Businesses segment". The second factor is the lifting of the restrictions imposed under the Restructuring Plan.

Goirigolzarri pointed out that during the third quarter of the year, "net customer growth exceeded 14,000 new customers per month", compared to somewhat over 11,000 in the first half.

Bankia's chairman also highlighted the increase in sales of value-added products in retail banking. "We have increased our production of consumer loans by 20% in the last 12 months" and "we have grown our market share of mutual funds and card revenue by 14 basis points since the beginning of the year".

More lending to SMEs

As regards businesses, Goirigolzarri emphasised that "serving SMEs is one of Bankia's primary objectives". This strategy is producing results. The customer base grew 6% in the second quarter of the year compared to the same period of 2016.

He also noted that the bank's business with SMEs and larger companies historically was focused mainly on long-term finance and not so much on working capital finance, "which meant we were missing out on the most profitable part of the business".

But that situation is changing. The increase in new lending to SMEs, which grew 25% in the second quarter of the year compared to the same period of the previous year, "has been accompanied by an increase in our share of working capital finance products", such as foreign trade finance (+55 basis points during first half) and reverse factoring (+60 basis points).

Goirigolzarri stressed that digitisation was playing a "key role" for the bank, both from the point of view of cost saving and from that of "enhanced customer satisfaction".

The Bankia chairman pointed out that, as of today, "one in ten customers who use the bank do so exclusively through digital channels" and that "our digital sales account for 16% of total sales".

As a result of all this, the bank "has gone from selling around 20 products per employee per month in 2012 to selling more than 45 at present".

Another driver of the bank's organic growth is "the end of the restrictions under the Restructuring Plan". The chairman recalled that throughout the last several years, "we have been barred from engaging in certain activities, such as real estate development finance or certain capital market transactions". Once these restrictions are lifted at the end of this year, "new business opportunities will be open to us".

Non-organic growth

As regards non-organic growth, Goirigolzarri referred to the merger with BMN, currently in progress. This merger "will make us market leaders in regions such as the Balearic Islands and Murcia, where until now we have had a very limited presence".

He also stated his conviction that this merger "will generate a great amount of value for our shareholders". Thus, the bank expects to obtain additional profit of 245 million euros in 2020, "which will mean a 16% increase in earnings per share".

Goirigolzarri ended his speech by recalling that Bankia's goal "is to continue to work on our positioning", so as to continue to be "the most efficient, the most solvent and the most profitable of the large banks" in Spain, as that is "the way to create value for all our shareholders and help repay the state aid to taxpayers".

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