Banca March obtained a consolidated profit of €20 million during the first quarter, up 19.4%, with increases in the gross and operating margin
21 May 2021 Category: Results
The consolidated profit of Banca March increased 19.4% to reach €20 million in the first quarter, with an increase in the group revenue for providing services of 7.8%, while the gross and operating margins increased 2.6% and 3.7%, respectively.
- The consolidated profit of Banca March increased 19.4% to reach €20 million in the first quarter, with an increase in the group revenue for providing services of 7.8%, while the gross and operating margins increased 2.6% and 3.7%, respectively.
- The net profit after tax from banking remained stable, to stand at €14 million at the end of the quarter, with an increase in income from the provision of services, excluding the Corporación Financiera Alba (CFA), 8.1%.
- The bank maintains its CET 1 capital adequacy ratio (18.22%), LCR (191.7%), DTL (130.0%) and NPL coverage ratio (59.9%) levels among the highest in the sector.
- Banca March continues to boast the lowest NPL ratio in the Spanish financial sector, even without having resorted to discounted portfolio sales: at 1.50% at the close of the month of March compared to a sector average of 4.55% (according to the latest data from the Bank of Spain).
- The specialist Private Banking and Wealth Management areas delivered very positive performances, with a 21.4% increase in assets under management, a 16.9% increase in turnover and a growth of 18.9% in customer numbers.
- The Corporate Banking Area continued strengthening its specialisation in providing advice to family businesses, cementing its leadership in short-term debt placements with a volume of issuances made in excess of €1.4 billion, 10% more than the first quarter of 2020. Banca March also continues to consolidate itself as a leader in sustainable bank financing, with a €420 million increase in transaction volume.
- Turnover in the Large Companies Unit grew by 7.1% compared to the first quarter of 2020, the number of customers rose by 6.6%, lending by 2.6%, customer funds by 12% and assets under management by 7.4%.
- The consolidated net profit of Corporación Financiera Alba (CFA), of which Banca March owns 15%, was €59 million during the first quarter, thanks to the better results of the investees.
- To date, the bank has supported all of the incentives rolled out by the Spanish government to mitigate the severe crisis triggered by the pandemic, participating in ICO-backed loans for companies and the self-employed and sector-specific payment holidays and moratoria, including some measures regulated by Royal Decree and others at the bank's own initiative. Banca March also participated in the ISBA-COVID lines of credit implemented by the Regional Government of the Balearic Islands for a total amount of €1.550 billion, of which 34% of the total volume and almost 50% of the transactions took place in the Balearic Islands.
- In the Balearic Islands, the Retail and Private Banking area, which accounts for the majority of the bank's activity in the region, saw lending increase by 15.3%, assets under management rise by 15.3% and customer numbers grow by 16.4%. The area posted increases in both net interest income (4.0%), ordinary income (12.0%) and operating income (5.4%).
- Banca March, true to its strategy and its business model, is committed to the development of its professionals. It is the only Spanish bank that boasts both the Top Employer and Great Place to Work® certification, the most prestigious recognition possible in the field of Human Resources. Furthermore, according to the latest ranking of the Great Place to Work consultancy firm, the bank is one of the top 10 companies to work for in Spain and the only Spanish bank included in this category (which includes 50 companies).
In a quarter affected by the beginning of the economic recovery after the impact of the COVID-19 crisis, the consolidated profit of the Banca March Group increased 19.4% to stand at €20 million in March. During the period, revenue from services grew 7.8% and the gross margin and operating margin increased 2.6% and 3.7%, respectively.
The net profit after tax from banking remained stable compared to March 2020, to stand at €14 million at the end of the first quarter, with an increase in revenue from the provision of services, excluding the CFA, of 8.1%.
Banca March continues to maintain robust financial and capital ratios with a CET 1 18.22% at the end of March, the highest ratio among Spanish banks and one of the highest in Europe. The bank recorded the lowest NPL ratio in the Spanish financial sector; 1.50%, without even resorting to the discounted mass sell-off of NPL portfolios, compared to an average of 4.55% (according to the latest data from the Bank of Spain). Likewise, the liquidity levels –LCR (191.7%) and DTL (130.0%)– and NPL coverage ratio (59.9%) are also among the highest in the sector.
The consolidated net profit of Corporación Financiera Alba (CFA), of which Banca March owns 15%, was €59 million during the first quarter, thanks to the better results of the investees.
In April 2020, the credit rating agency Moody's ratified its rating of Banca March's long-term deposits as A3 with a "stable" outlook, one of the best ratings in the Spanish financial system, ahead of the Kingdom of Spain (currently Baa1).
In the Balearic Islands, thanks to the bank's deep understanding of and affinity with its home market, the Retail and Private Banking area –which accounts for the majority of Banca March's business in the region– saw lending rise by 15.3%, assets under management by 15.3% and customer numbers by 16.4%, with increases in net interest income (4.0%), ordinary income (12.0%) and operating income (5.4%).
Banca March places people and their professional development at the heart of its strategy. As a result of this philosophy, over the last two years Banca March has obtained the Great Place to Work® certification, which it adds to the Top Employer certifications received in 2019, 2020 and 2021. This year, Banca March was included for the first time in the Best Workplaces in Spain, which is prepared by Great Place to Work® and was placed among the Top 10, being the only Spanish bank to be included in the classification, which contains 50 companies, demonstrating that it is one of the Best Companies to Work for in Spain.
José Luis Acea, the bank's Chief Executive Officer said: "From Banca March, we would like to once again show our solidarity with the people and families hit by the disease and the companies that have seen their businesses affected. The experience of the pandemic has reaffirmed our convictions: our customers and professionals must be at the heart of our strategy and our commitment to society must lead us to continue pursuing other options to offer sustainable financing proposals and wealth advisory services. Now is when our motto, Shared Growth with our customers, employees, shareholders and society in general, becomes highly relevant. It is necessary to listen to and provide an answer to all the requirements, and at Banca March, today more than ever, we want to be up to the challenge. With these robust foundations we are determined and well-positioned to face the period set to unfold after the coronavirus crisis, and are fully committed to continuing to support our customers”.
Wealth advisory service with innovative products
The specialist Private Banking and Wealth Management areas performed excellently, with a 21.4% increase in assets under management, a 16.9% increase in turnover and growth of 18.9% in customer numbers.
The Banca March Group continues to spearhead innovation in private banking products, offering the sector's most comprehensive range of attractive investment proposals for all saver and investor profiles: Co-investment, added-value Discretionary Portfolio Management (DPM), alternative funds, private equity (March Private Equity), sustainable investment and impact funds of funds, thematic funds (March Asset Management) and special long-term savings products for Private Banking and Wealth Management clients, such as the Unit Linked products developed by March Vida.
At the end of March, Banca March provided more than 4,600 customers with added-value Discretionary Portfolio Management (DPM) services, representing an increase of 77%, with assets in delegated portfolios of €1.440 billion, an increase of 69% compared to the first quarter of 2020. It is worth noting the dynamic of the Next Generation, strategy, based on global megatrends identified by the bank's team, which increased its assets under management by more than 395% year-on-year to March, with over €500 million.
The alternative investment proposals, which the bank added to its range of solutions in 2019 through partnerships with K2 Advisors-Franklin Templeton (DPM) and Banque Syz (fund of funds), already have over €200 million under management, double the volume registered at the end of March 2020.
The Sustainable and Responsible Investment (SRI) proposals in tandem with J. Safra Sarasin and impact investing strategies with Amundi-CPR, also maintained the outstanding investment inflows registered upon their launch, with combined Assets under management in excess of €110 million at the close of the first quarter of this year.
Co-investment continues to be one of the hallmarks of Banca March. Banca March offers its customers the chance to invest in the same opportunities as the bank itself, such as the T2 ELTIF Energy Transition Fund, created exclusively for Banca March by Tikehau Capital to offer the bank's customers investment opportunities in private equity projects with a focus on the energy transition, and Oquendo IV, which provides financing for Spanish mid-cap companies through mezzanine loans and other flexible instruments. Last year, the bank also closed its third logistics infrastructure project with Pavasal, and completed investments in six hydroelectric assets in Portugal in partnership with Mirova - Natixis IM’s sustainable infrastructure investment manager –, Engie – one of the world’s largest energy operators – and Crédit Agricole Assurances.
With global assets under management of more than €5 billion as at 31 March 2021, March Asset Management (AM), is the Group's manager and one of its strategic parts. March AM ranks fourth in the Spanish market by total volume of assets under management in SICAVs, with a total of €2.138 billion under management in these vehicles at the end of March. The three institutional SICAVs that it manages are traditional liquid co-investment products and one of the hallmarks of Banca March. Torrenova is Spain's largest SICAV, with €905.9 million under management as at March. It was created over 20 years ago as an investment vehicle for the bank's shareholders; and more than 4,308 customers currently hold investments in the fund. Bellver (352.4 million euros in assets under management and 2,510 shareholders) and Lluc (210.1 million euros in assets under management and 1,336 shareholders) complete this group of products.
Among the March AM equity funds, March Europa and March Global performed well with accumulated returns for the quarter of 13.43% and 12.35%, respectively, very much above their benchmark indices (6.91% and 5.74%). In turn, in the Luxembourg range, March Iberia and Mediterranean Fund ended March with accumulated returns for the year of 10.40% and 11.06%, respectively, very much above their benchmark indices (5.71% and 5.74%).
With regard to pension plans, the year-on-year return of the Pensión Creciente and March 80/20 was outstanding, which were placed in the first quartile of the classification (Inverco) of the plans in their same category, and March Acciones and March 50/50 In the second quartile of theirs.
Support and advisory services for family businesses
In Corporate Banking, the bank's activity focuses on corporates, family businesses and entrepreneurial families, specialising particularly in alternative financing, direct lending, customised treasury solutions and risk hedging. Turnover in the Large Companies Unit grew by 7.1% compared to the first quarter of 2020, the number of customers rose by 6.6%, lending by 2.6%, customer funds by 12% and assets under management by 7.4%.
To date, the bank has supported all of the incentives rolled out by the Spanish government to mitigate the severe crisis triggered by the pandemic, participating in ICO-backed loans for companies and the self-employed and sector-specific payment holidays and moratoria, including some measures regulated by Royal Decree and others at the bank's own initiative. Banca March also participated in the ISBA-COVID lines of credit implemented by the Regional Government of the Balearic Islands for a total amount of €1.550 billion, of which 34% of the total volume and almost 50% of the transactions took place in the Balearic Islands.
In December 2020, Banca March was the first European bank to reach an agreement with the European Investment Bank (EIB) to provide financing backed by the European Guarantee Fund (EGF), one of the instruments approved last year to mitigate the impact of COVID-19. Through this agreement and others signed with the EIB on the same date, Banca March will channel more than 600 million euros in funding into Spanish SMEs and large companies.
Towards the end of 2019, the bank launched the Tourism and Leisure Unit within the Corporate Banking area. The unit offers highly specialist services for the tourism and hotel sector, reinforcing the resources dedicated to this area and enhancing the bank's customer service model and value proposition. Banca March has staunchly supported this activity, providing new financing, formalising moratoria, delaying maturities and providing solutions to companies that allow them to reinforce their shareholders' equity, such as sale&lease and sale&management operations, divestment of non-strategic assets or the incorporation of financial partners.
Banca March remains at the top of the ranking of Registered Arrangers and Dealers for short-term MARF and ECP commercial paper programmes for Spanish corporate issuers. The bank has placed, through the 34 advised programmes in which it participates, emissions in excess of €1.4 billion in short-term instruments (MARF and ECP commercial paper) during the first quarter of 2021, an amount that exceeds that of the first quarter of 2020 by 10%. During the first three months of the year, Banca March has obtained an increase in targeted and placed volume for medium-term bonds of more than 100% compared to the same period of 2020.
With regard to syndicated and club financing, Banca March has participated in transactions that represent a total aggregate volume of more than €590 million during the first quarter of the year. The bank has a firm commitment to focusing on mainly ESG financing.
In this area, the volume of sustainable bank financing operations increased by €420 million compared to the same period last year. Among its other transactions, Banca March formalised a structured financing of €80 million with the Barceló Hotel Group to execute sustainable projects and has also participated, with a total of six other entities, in the first Iberostar sustainable financing operation.
Banca March – Consolidated group
|Net interest income||36.1||37.0||-0.9||-2.4%|
|Loans and advances||8,388.4||7,972.6||415.8||5.2%|
|NPL coverage ratio||59.90%||53.48%|
|Capital adequacy ratio||18.22%||15.04%|