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On 28 November 2012, the BFA-Bankia Group announced its Strategic Plan 2012-2015, coinciding with the approval by the European Commission of the Bank’s Restructuring Plan, which was influenced by the limitations imposed by the authorities as a result of the state aid received and by the complex macroeconomic context. The Strategic Plan was focused on improving the Bank’s solvency, profitability and efficiency.
On 1 February 2016, the BFA-Bankia Group announced the completion of its Strategic Plan 2012-2015, the solvency, profitability and efficiency targets having been met.
These targets, promised to the European and Spanish authorities, were met two years ahead of the date set in the Restructuring Plan, despite the difficult economic environment, the historically low interest rates and the various contingent liabilities the Bank had to face arising from its past management, most notably the management of hybrid instruments and of the IPO.
The solvency and profitability targets were largely achieved at the outset, with the capital increase and the transfer of assets to the Asset Management Company for Assets Arising from Bank Restructuring (Sareb). Bankia took additional measures that affected these ratios, aimed at strengthening the capital base, reducing risk-bearing assets and achieving a solid liquidity position by readjusting the funding structure to increase the proportion of retail deposits.
Targets met: solvency, profitability and efficiency
Return on equity (ROE) rose above 10%, with accumulated profit at BFA Group level of 4,081 million euros, above the 3,100 million euro target. This goal was achieved through four main lines of action: strengthening of the competitive positioning, rebalancing of the balance sheet, efficiency improvement and reduction of the risk premium.
To meet the profitability target, the Bank had to be efficient and succeeded in improving its efficiency ratio to 43.6%. In addition, the cost of risk fell below 50 basis points and disposals of non-strategic assets brought proceeds totalling 61,400 million euros. Capital and liquidity generation also exceeded projections by a large margin. Between 2013 and 2015, the BFA-Bankia Group generated 44,600 million euros of liquidity, as against a target of 28,800 million, and 6,800 million euros of capital, compared to the projected 5,400 million for that same period. Similarly, BFA’s Basel III CET1 ratio, on a fully loaded basis, doubled the level it stood at immediately after the injection of state aid.
The BFA-Bankia Group has completed its Strategic Plan 2012-2015, having met its targets and having improved its solvency, profitability and efficiency.
Bankia also improved its positioning, achieving growth in key segments, including off-balance-sheet funds, credit cards, consumer finance, business lending and trade finance. Lastly, as a consequence of the Restructuring Plan, the BFA-Bankia Group fulfilled the commitment to downsize its branch network to 2,000 branches and reduce its workforce, with the ultimate goal of preserving 14,500 jobs.
José Ignacio Goirigolzarri: “We have met each and every one of the targets that were set”*
*Only avalaible in Spanish.
Consult the details of the Strategic Plan 2012-2015
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