increased profitability
Bankinter Group reported a profit of 184.7 million euros for the first quarter of 2023, a 19.7% rise from the same period a year earlier, according to the CNMV filing this Thursday. The results reflect a quarter driven by broader activity across all business lines and geographies despite regulatory changes and a challenging market backdrop.
By the end of March, profit before tax stood at 294.4 million euros, up 37.4%. The bank notes that it paid 77 million euros in new taxes during the quarter, aligning with the tax framework facing the financial sector.
Interest income reached 522.2 million euros in Q1, marking a 63.2% expansion, driven by higher customer margins and sustained business volumes. Customer margin continued its upward trajectory through the last two quarters, rising from 1.82% in Q1 2022 to 2.96% at the end of March this year.
Gross profit margin climbed to 615.9 million euros as of March 31, a 23.3% increase, even as regulatory costs rose to 14% of gross margin due to the new bank tax. Net revenue from services contributed 22% of gross margin, up 4% year over year, with notable gains in collections, payments, and securities brokerage, totaling 153 million euros in the first three months.
Operating margin before provisions reached 396.3 million euros, up 35.8%. After absorbing operating expenses, which grew 5.7% but lagged revenue growth, the quarter showed improved efficiency and scale.
increased profitability
The period also showcased noteworthy improvements in key account metrics, illustrating stronger profitability, efficiency, asset quality, and solvency. Over the last twelve months, return on equity rose to 13.7% from 9.8% a year earlier, with a return on tangible equity (ROTE) at 14.5%.
The fully loaded CET1 capital ratio reached 12.2%, reflecting a 4.5 percentage point advantage over the ECB minimum. The NPL ratio edged up by eight basis points from the prior quarter but fell by two basis points year over year to 2.18%, with coverage at 66.5% versus March 2022 and steady from December. Spain’s NPL stood at 2.4% at quarter-end.
Productivity improved to 35.7% from 41.6% a year earlier, with Spain at 33.8%. Liquidity remained solid as deposits exceeded loans, and the twelve-month average liquidity coverage ratio stood at 198%, above regulatory requirements.
Balance
The group’s total assets closed the quarter at 105,945 million euros, down 4.4% from a year earlier. Customer loans reached 73,074 million euros, up 4.9% annually, with growth concentrated in Spain at 1.7% for loan investments.
Individual client funds totaled 74,262 million euros, reflecting a shift from deposits to fixed income and mutual funds, which caused a 1.2% decline year over year. The bank highlighted notable quarterly increases in fixed income assets by 3,100 million euros and investment funds by 1,500 million euros.
Business areas
Across activities, the largest revenue contribution came from a 2.9% expansion in the loan portfolio, totaling 30.3 billion euros versus Q1 2022. Spain alone posted a 1.3% gain in loan activity.
The ICO line volume reached 5,800 million euros with a non-performing loan ratio of 4.2%. International activity showed positive momentum, with investment volume at 7.6 billion euros, up 11% from the end of March 2022.
Managed wealth banking volumes reached 53.9 billion euros, up 6% from a year earlier, and retail banking assets stood at 42.3 billion euros, up 1.9 billion euros or 5%. Between the two segments, total capital was 96.2 billion euros at the end of March.
Increase in mortgage production
On the asset side, the residential mortgage portfolio totaled 34.3 billion euros at quarter-end, up from 32.0 billion a year ago. Growth in Spain stood at 1.9% versus the prior year. New mortgage production across all geographies and brands rose 2% year over year to 1.7 billion euros.
In Portugal, the investment portfolio reached 8.4 billion euros, up 17% annually, while client funds increased 5% to 6.6 billion. Despite slightly higher expenses, pre-provision income was 50 million euros, with a pre-tax result of 43 million euros for the subsidiary, up 177%.
Bankinter Consumer Finance reported an investment portfolio of 5.7 billion euros, a 50% year-over-year increase, including 2.8 billion in consumer loans (up 37%) and 1.6 billion in Irish mortgages under Avant Money. The mortgage portfolio in Ireland grew 179% in the year.
Avant Money, including mortgages, posted 2.3 billion euros of investment volume, up 102% from twelve months earlier. Evo Banco’s loan portfolio reached 2.967 billion euros at quarter-end, up 48% from a year ago, with new mortgage production of 299 million euros in Q1 2023, a 64% increase from the prior year.