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Banca March - Hacer crecer, seguir creciendoNews

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At Banca March, we want to keep you always informed, and this section gives you the opportunity to find out whatever you want to know about.

09/06/2017

Results for the first half of 2017

The Banca March group doubles the profit from its banking activity earning €113.8 million up to June.

  • Profit from banking activity doubled in the first six months of the 2017-2019 strategic plan, going from €25.7 million in the first half of 2016 to €56.2 million in the same period of this year.
  • The increases were particularly significant in off-balance sheet funds, with an increase of 20.8%, and in revenue from services, with growth of 30.7%.
  • Banca March's business model has been strengthened by solid financial and capital ratios: the institution has the lowest non-performing asset ratio in the sector in Spain (3.5%) and one of the highest levels of solvency (19.6%) and liquidity (249%) in Europe. Moody's acknowledged this solidity and upgraded the institution's long-term rating to A3, the highest rating in the domestic financial system.
  • Customers are once again showing a high level of confidence in the institution, as shown by the studies of reference conducted by the independent firm Stiga, which place Banca March second in the sector with a score of more than 8 for Overall Satisfaction with the Institution and a Net Promotor Score (NPS) of 34.4%.
  • The Private Banking business experienced double-digit increases for all parameters: business volume (+16.2%), number of customers (+20.5%) and off-balance sheet funds (+18.2%).
  • The Corporate Banking area reinforced its leadership, becoming the institution of reference for financing alternatives for companies and family-owned businesses. During this period, Banca March consolidated itself as the main coordinating entity of promissory note programmes for the Alternative Fixed Income Market (MARF), with a market quota exceeding 50%.

During the first half of 2017, the Banca March Group's net profit amounted to €113.8 million, representing a 172.6% increase compared to the same period of the previous year. The consolidated results include the capital gains made through the sale of all its shares in ACS.

Normal banking activity continues to show solid, dynamic progress. It therefore multiplied its profit by 2.2 during the first six months of the 2017-2019 Strategic Plan, compared to the same period of 2016, to reach €56.2 million.

During the first six months of the current financial year, revenue from service provision grew by 30.7%; off-balance funds by 20.8% and the total business volume of the bank as a whole rose by 10.0%. At the end of June, Banca March's total net assets as an individual bank were around €1.0564 billion.

GROWTH IN ALL MARGINS AND SPECIALIST AREA

All business margins saw significant increases. Particularly noteworthy was the growth of 30.7% in revenue for service provision, mainly from investment fund management and SICAV, Capital and Treasury Market activities and the distribution of insurance policies and payment methods. In fact, the contribution of this revenue to the ordinary margin of banking activity is increasing, having reached 66.1% by June 2017; a clear reflection of Banca March's strategy to specialise in consultancy for companies and Private Banking.

STRONG GROWTH IN BANKING ACTIVITY

José Luis Acea, CEO of Banca March, said: "We are very happy with the results obtained in the first half of 2017. It's been a very special time for our future development, as we have taken the first steps towards our 2017-2019 Strategic Plan. The figures have been very positive in all the bank's areas, thanks to the good work and complete dedication of our more than 1,500 professionals. All in line with the values of caution, co-investment and growth. The results are the fruit of a non-replicable business model, the best solvency, non-performing asset and liquidity rates in Europe and a specialisation in Private Banking that is recognised amongst our customers, as shown by the increased volumes obtained".

SOLVENCY

True to its philosophy of prudent long-term management, Banca March's business model is backed by solid financial ratios: at the end of June, its solvency ratio reached 19.6%, one of the highest in Europe; its non-performing loans ratio stood at only 3.5%, the lowest in Spain, with a very notable difference compared to the sector average; and its liquidity ratio reached 249% at the close of the first half of the year.

The strength of Banca March's credit profile, in terms of capital requirements, as well as the quality of the assets on its balance sheet and Banca March's extensive capacity to cover its customers' financial requirements were acknowledged by credit rating agency Moody's, which recently updated Banca March's long-term debt rating to A3 with a stable outlook. Banca March therefore has the highest rating in the Spanish financial system, above that of the Kingdom of Spain (currently Baa2). In accordance with the system used by Moody's, Banca March's rating can only improve if Spain's does. The rating for Banca March‘s short-term deposits remains at P2.

SATISFIED, LOYAL CUSTOMERS

Service quality is one of Banca March's cornerstones, which is why the institution uses a comprehensive system to monitor customer opinion which is based on the highest market standards and exhaustive monitoring to seek constant improvement. According to the Customer Satisfaction Benchmarking published by independent firm Stiga for the Spanish market, the most recent data shows that Banca March achieves levels of excellence in terms of customer satisfaction. Specifically, said study has the institution in second place, both for Overall Satisfaction with the Institution, with a score of over 8, and in the customer recommendation indicator, measured using the method known as NPS (Net Promoter© Score); at 34.4% for the bank as a whole in June.

A BENCHMARK IN PRIVATE BANKING

The Private Banking business, the main focus of Banca March's Strategic Plan and a sector in which it aims to become the main benchmark institution in the Spanish market, recorded a strong boost during the first half of 2017, in line with the goals the institution has set itself. The number of customers in this business segment was up 20.5% compared to the same period of 2016; the institution's business volume increased by 16.2% and off-balance sheet funds grew by 18.2%. All the parameters therefore show percentage growth in the double digits.

With regards to customers' confidence in the Banca March Group's Private Banking services, one of the most illustrative signs is the favourable evolution of the total SICAV assets under the management of March Asset Management. SICAV assets reached €3.407 billion by the end of June, placing it second in the Spanish market in terms of SICAV volume. It was the institution with the largest increase in SICAV assets in the Spanish market: €221 million in the first half of the year.

March A.M., whose global assets, as at the end of the first half of the year, amounted to €7.345 billion, is a key piece in the Group's strategy. The asset management company has increased the assets under its management by around €1 billion during the first six months of the year. The excellent profitability obtained by the fund management team and consistency thereof in the long-term are behind the confidence investors place in the products of March A.M. every day. Additionally, an agreement has recently been reached with the MFEX fund platform for the distribution of the products of the Luxembourg SICAV March International in over 30 countries, once again demonstrating the institution's capacity to offer its customers and potential customers services and products with added value.

UNIQUE OFFER OF COLLECTIVE INVESTMENT WITH CUSTOMERS

The institution continues to reinforce itself and is decidedly committed to its offer of collective investment, which allows our customers to invest in the same products as the bank, a unique concept that sets us apart in the Spanish financial market. The three institutional SICAVs managed by March Asset Management (March A.M.) are a good example of collective investment. Torrenova is the most important SICAV in Spain with €1.535 billion in assets under management. It was created over 20 years ago as an investment instrument for bank shareholders and currently comprises 6,677 customers. Bellver (555 million euros’ worth of managed assets) and Lluc (226 million) round off this group of products. All three cases are examples of a unique SICAV model, which any of our customers can access with a minimum investment of just one share thus benefiting from the yield produced by these financial instruments in the same way.

Customers also have the opportunity of participating in other forms of collective investment with the bank’s shareholders through several of the Group’s other investment alternatives on offer in the real estate sector, special funds and business projects, among others. In recent years, Banca March's customers have participated in varied projects. For example, in Deyá Capital, a fund managed by Artá Capital, a capital development manager for the Banca March Group, which invests in non-listed, medium-sized companies in Spain and Portugal.

Another interesting collective investment success story is that of Pepe Jeans. Artá Capital got into the well-known company in 2010. Since then, the company has embarked on a successful international expansion strategy which led the group to increase its EBITDA by more than 15% in five years. Artá Capital and its partners sold their shares in 2015, leaving a stronger, more diverse company with an IRR of 18% for its investors.

As an example of a real estate project, Banca March recently reached an agreement for the purchase of the ABC Serrano Shopping Centre from CBRE Global Investment Partners in association with IBA Capital Partners, with the goal of helping its customers to get in on the investment.

EXCELLENT STAFF

100% of Banca March's employees participate in a training programme on financial advice and information, meaning the institution exceeds the MiFID guidelines published by the European Securities and Markets Authority (ESMA). Based on this plan, the institution offers training not only to those who directly advise clients, but also to those who provide information and marketing services and to staff working in the bank's technical and administrative areas. The rate of professional certifications continues to increase, with an 80% pass rate in the most recent exams to obtain EFPA Spain's EFA (European Financial Advisor) and EIP (European Investment Practitioner) qualifications.

The initiative aims to ensure that Banca March's staff are as highly qualified as possible. It is directly based on the four pillars of the bank’s business model: commitment to shareholders, unique and exclusive products and services, superior quality of service and excellent staff. The bank has been providing training on financial consultancy and information for a number of years, which since 2016 has been on a more comprehensive basis. It is one of the factors that has made the bank a leader in the sector in terms of service quality, as perceived by its customers.

CORPORATE BANKING: ALTERNATIVE SERVICES WITH NO CONFLICT OF INTERESTS

The Corporate Banking business, specialising in the field of companies, family-owned businesses, continues to afford Banca March a leading position in some of the key businesses in this area, such as, for example, promissory notes for the Alternative Fixed Income Market (MARF). As an underwriting entity, Banca March's market share currently exceeds 50%, having worked with such prestigious issuers as Gestamp, Elecnor, Barceló, Tubacex, Europac, Maxam and Fortia Energía.

In addition to the traditional banking services (financing, collection and payment settlement, etc.), the Corporate Banking area also offers customers a broad range of corporate consultancy products with increased added value that clearly set us apart from the competition, such as: balance sheet disintermediation, mergers and acquisitions, direct lending, customised treasury solutions and risk hedging. These highly specialised services are exclusive to Banca March. The institution's firm commitment is to offer our client companies alternative forms of financing, which they can access with the support of a dynamic family bank and the guarantee of no conflicts of interest, another of our characteristics most appreciated by the market.

EXECUTION OF THE STRATEGIC PLAN

The results obtained during the first half of this year are in line with that set out in the institution's Strategic Plan for the 2017-2019 period, the goal of which is to reinforce Banca March as an institution of reference in the specialised business it focusses on; private banking and consultancy for companies, together with increased profitability in all areas of activity.

As a result of this specialisation, the 2017-2019 Strategic Plan envisages increases of 50% by 2019 in: off-balance sheet funds, revenue from the provision of services and Private Banking customers.

TECHNOLOGICAL COMMITMENT

In its commitment to offering its customers the best possible service, Banca March seeks to be at the forefront of technology. To this end, the institution continues to invest heavily in meeting both the internal and external demands of a modern, dynamic, multi-connected bank.

In recent years, Banca March has doubled investment in technology, with significant results and important projects under way. For example, all its account managers have the necessary means to perform any operation with customers without the need to physically be in the office. It has also embarked on a plan to transform its offices into Business Centres focussing on consultancy, boosting the use of multiple channels to facilitate the banking operations required and demanded by customers. Banca March also has its subsidiary Inversis, a leading platform for the provision of technological services.

Banca March's digital transformation process has been recognised this year, obtaining some of the Computing Awards of the Digital Era, specifically in the "Processes and Fulfilment" category.  

Key points of 1st half-year Banca March results

Banca March

DATA ON BANKING ACTIVITY 30/06/2017 30/06/2016 Variation
Amount %
Customer bank funds 9,997.1 9,146.9 850.2 9.3%
Off-balance sheet funds 11,165.0 9,239.0 1,926.0 20.8%
Loans to customers 8,032.0 7,238.9 793.1 11.0%
BALANCE DETAILS 30/06/2017 30/06/2016 Variation
Amount %
Net Equity 4,819.0 4,213.0 606.0 14.4%
Total assets 17,784.8 16,460.8 1,323.9 8.0%
PROFIT AND LOSS ACCOUNT DETAILS 30/06/2017 30/06/2016 Variation
Amount %
Interest margin 75.0 83.8 -8.8 -10.5%
Commission 98.9 75.7 23.2 30.7%
Allocated result 113.8 41.8 72.1 172.6%

Key ratios

DEFAULT 31/06/2017 31/06/2016
Non-performing loan ratio 3.51% 3.61%
Coverage ratio 50.49% 84.76%
Capital 30/06/2017
Solvency ratio 19.61%
Tier 1 19.31%

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