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BFA-Bankia Group Meets Strategic Plan 2012-2015 Objectives

The BFA-Bankia Group today took stock of the fulfilment of the Strategic Plan 2012-2015 that was unveiled on 28 November 2012 at the time the European Commission gave the go-ahead to the entity's restructuring plan.
Bankia Comunicación

By  Bankia Comunicación

Publish on 
01 February 2016

  • Profitability rises to over 10%, with accumulated profits at BFA Group level of €4,081 million euros, above the projected €3,100 million
  • Efficiency improves to 43.6%, cost of risk falls to less than 50 basis points and disposal of non-strategic assets brings in more than €61,400 million
  • Generation of capital and liquidity amply meets target set three years ago, with BFA's fully loaded CET1 BIS III capital ratio doubling level recorded after aid was received
  • Bankia clearly improves its positioning, with growth in key segments such as off-balance sheet funds, credit cards, consumer finance, business lending and foreign trade
  • The new Bankia share has outperformed its main competitors by 73.2% since the new share began trading in 2013

The BFA-Bankia Group today took stock of the fulfilment of the Strategic Plan 2012-2015 that was unveiled on 28 November 2012 at the time the European Commission gave the go-ahead to the entity's restructuring plan.

The basic targets set at that time have been met despite a difficult economic environment, with interest rates at all-time lows, and various contingencies relating to the bank's past management that the group has had to face over the last three years, most notably, the management of its hybrid instruments and the initial public offering.

BFA and Bankia chairman, José Ignacio Goirigolzarri, today recalled some of the commitments first made public in 2012. "At that time there was widespread disbelief amongst all players regarding the Bankia team's capacity to fulfil these objectives; today we can say that we have lived up to what we promised, and this is something we can take pride in, because there are not many precedents of banks being subjected to such a severe Restructuring Plan as Bankia's".

"The ultimate goal of that Strategic Plan was more than just to make Bankia a solvent institution, which required receiving aid; the aim was to make it a profitable and sustainable bank, the key to which has been its management these years. In 2012, after receiving the aid, we were last in solvency and we were not profitable. Today, we are the most profitable and one of the most solvent of the major banks, and that guarantees the future of the institution", added Goirigolzarri.

The chairman first reviewed the improvement in the bank's competitive position. At that time Bankia targeted growth in high-value products in which it had little presence.

In this regard, Bankia has succeeded in boosting its market share in investment funds from 4.39% in 2012 to 5.44% in 2015, that is, a gain of 24% in only three years. And in pension plans net contributions have increased 411 million euros in that same period.

In lending, market share in credit cards improved from 5.25% to 6.57%, a gain of over 25%. In consumer finance, starting from a base of 305 million euros in 2012, the bank's lending in this segment rose to over 1,130 million in 2015. 

Greater Market Share in Businesses   

In lending to business, the market share of barely 2.67% of foreign trade financing in 2012 has improved to 7.6% at present; and in trade discounting, the share now stands at 7.47%, up from 6.15% three years ago.

"The key to achieving these gains has been improving the quality of the service delivered to customers. I have said it many times: no project is sustainable over time unless you have satisfied customers", Goirigolzarri recalled.

In this respect, he explained that 2012 Bankia's service quality (as measured through mystery shopper surveys conducted by an external consultancy) was 5.55 out of 10, below the sector average. In 2015 this improved to 7.28, above the sector average.

The customer satisfaction level also jumped, going from 77.3% to 82.4%, and this all helped boost the bank's commercial capacity from 22.7 products sold per employee per month to 34.6.

Disposal of Non-Strategic Assets   

From the standpoint of balance sheet management, one of the challenges facing the BFA-Bankia Group was to lessen its volume of non-productive assets. The target charted in this respect was to reduce such assets from 90,000 million euros to 40,000 million euros, and three years late the figure for non-strategic assets has been brought down to 28,600 million euros, beating the target by more than 10,000 million euros.

Another pivotal factor for the sustainability of a project is efficiency. In 2012, Bankia spent 55.7 euros to obtain 100 euros in revenue. The objective was to bring this ratio down to 45%, and last year the efficiency ratio came in at 43.6%.

In 2012 Bankia had to carry out a severe restructuring of its balance sheet, prompting it to chart a path of return to normalcy that involved bringing provisions down to no more than 0.5% of the loan portfolio. In 2015 the target was met with a risk premium of only 0.43%.

After the allocations of 2012, the bank's provisioning level continued over these last three years with a further 3,300 million euros set aside to strengthen the balance sheet. Bankia has thus managed to maintain its coverage ratios even while bringing its balance of non-accrual loans down by 7,000 million euros from the maximum reached.

Boosting Solvency

Another key aspect over these three years has been solvency. After the injection of public aid, the BFA-Bankia Group's CET1 BIS III capital ratio, on a fully loaded basis, was only 5.85%, barely allowing it to meet the regulatory minimum. Today this ratio would fall far short, as capital requirements for the entire sector have been tightened.

However, the strong organic capital generation since then, via profits and reduction of risk assets, has boosted the fully loaded CET1 BIS III ratio to 12.88%.

And, on the liquidity front, the BFA-Bankia Group in these three years has generated 44,600 million euros, compared with its targeted 28,800 million euros.


In all, Bankia has managed to improve its profitability each year and closed 2015 having met the target of bringing return on equity (ROE) up to close to 10%. In fact, ROE in 2015 was 10.6%, up from 8.6% in 2014 and 5.9% in 2013.

These figures do not take into account the impact over the last three years of the provisions made to cover lawsuits in relation to the IPO, a contingency that was not envisaged when the Strategic Plan was drawn up.

BFA has recorded an accumulated net profit in these three years of 4,081 million euros, well above the 3,100 million projected when the Strategic Plan was prepared.

All of this has earned Bankia the recognition of the market, allowing it to raise 5,800 million euros in this period in debt issues (senior, subordinated and asset-backed bonds) and the placement of 7.5% of its capital with institutional investors.

This progress has also been reflected in the share's trading price in comparison with the rest of the sector. Taking as baseline the shares of Spain's six major banks in May of 2013, when the new Bankia shares began trading, Bankia's stock has outperformed the sector average by 73.2%.


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