Ibercaja closed the first quarter of 2023 with a net profit of 54 million euros after fully paying 29 million euros in bank tax. Profit for the prior year rose by 30.5 percent and reached 83 million euros in local terms, excluding the temporary tax.
The Aragon-based bank highlights a strategy to redirect client resources toward higher value products such as mutual funds, retirement plans, savings, and life insurance. The rise in interest rates in recent months helped Ibercaja generate 291 million euros in recurring income, up 25.8 percent from the first quarter of the previous year. Profit before provisions stood at 115 million euros, 15.7 percent higher than January to March 2022.
According to Ibercaja, the institution continues to strengthen asset quality indicators and presents one of the strongest balance sheets in the Spanish financial system. With a default rate of 1.6 percent, the bank shows a gap of 195 basis points versus the industry average. The coverage ratio has increased to 90.7 percent, and solvency remains solid, with a fully loaded CET1 capital ratio of 12.8 percent. Based on these results, Ibercaja distributed 60 percent of quarterly earnings as dividends.
historic quarter
Ibercaja’s client funds remained almost flat since the end of 2022, totaling 68,571 million euros, down 0.6 percent on a quarterly basis. The report cites the excellent performance of wealth management and life insurance as contributing factors. The rise in early repayments on housing loans, with volumes doubling versus the first quarter of 2022, alongside higher consumer spending by families amid the inflationary environment explains the modest decline in client funds in the quarter. In this context, Ibercaja grew its market share in client funds by two percentage points to 3.48 percent. Since 2019, client funds rose 13.1 percent to 7,900 million euros, following increases observed during the pandemic.
This evolution rests on a business strategy that focuses on diversifying customer resources into products that deliver greater value and foster loyalty and satisfaction. In a new environment of higher interest rates, the bank emphasizes an attractive range of mutual fund and life insurance products tailored to clients’ needs, offering guidance in an uncertain and challenging quarter for financing individuals, families, and companies. This approach positions Ibercaja as the bank that most actively diversifies customer resources, with 49.3 percent of the total in asset management and life insurance.
With these factors, the bank added 1.673 million euros, a figure surpassing the total entries recorded for all of 2022 in the first three months. This record contribution pushed its managed assets and life insurance volume to an all-time high of 33,788 million euros, lifting the market share by 18 basis points to 5.3 percent in a single quarter. The bank’s advisory model, rooted in its expertise in mutual funds, pension plans, and insurance, along with its close relationship with customers and its adaptability to needs, remains distinctive.
Ibercaja’s mutual funds attracted 1.4 billion euros of new money between January and March, increasing the sector’s market share by 25 basis points in three months to 15 percent of total entries, reaching a new historical high of 6.1 percent.
The broader uncertainty that affects corporate activity, cautious investment decisions, and the rise in interest rates weighed on loan demand from households and other customer segments. The formalization of loans and credit between January and March reached 1,285 million euros, a 16.7 percent decline compared to the first quarter of 2022. The bank maintained its market share by tracking a similar pattern to the sector during the quarter.
digital customers
Mobile banking app users reached 694,000, up 11.3 percent year on year. The total number of digital customers surpassed 928,000, representing 60.7 percent of Ibercaja’s client base.
Digital sales continued to stay above 40 percent and remained on track to meet a 45 percent target in the 2023 Challenge Plan for the end of the strategic three-year period. In particular, the use of these channels is rising in mortgage contracts, which currently account for 29.8 percent, and in risk insurance, 9 percent.
Note: all figures and statements reflect the bank’s latest reported data and are presented to illustrate the quarterly performance and strategic focus on diversified customer resources and digital channel growth. (Ibercaja quarterly report, Q1 2023)