News

• Banca March's consolidated profit was up 14.5% to 43 million euros in the first half of the year, on the back of an 11% rise in the Group's revenues from services and an 11.9% increase in gross income.
• Net profit from banking activity stood at 24.4 million euros at the end of the first half, with a 10% increase in revenues from services, excluding Corporación Financiera Alba (CFA).
• The specialist Private Banking and Wealth Management areas delivered highly positive performances, with assets under management up 20.0%, business volume up 17.5% and customer numbers up 19.3%.
• In the Balearic Islands, the Private Banking area outperformed with a 12.5% increase in business volume and a 20% rise in customer numbers, thanks to the bank's in-depth knowledge of, and strong links with, its home market.
• The bank boasts the highest CET1 capital adequacy ratio (18.37%) in the Spanish banking industry, and its LCR (233.0%), DTL (137.8%) and NPL coverage ratios (66%) are among the strongest in the sector.
• Banca March continues to boast the lowest NPL ratio in the Spanish financial sector, even without having resorted to discounted NPL portfolio sales; at the end of June, the bank's NPL ratio stood at 1.62%, versus a sector average of 4.4% according to the latest data from the Bank of Spain.
• The Corporate Banking Area continues to consolidate its specialisation in family business advisory services and cement its leadership position in short-term debt placements (MARF and ECP commercial paper programmes), with a total issuance volume of over 2.8 billion euros, up 40% versus H1 2020.
• In the Large Companies Unit, business volume was up by 5.7% versus Q1 2020, lending was up 5.9% and assets under management grew by 21.9%.
• The consolidated net profit of Corporación Financiera Alba (CFA), of which Banca March owns 15%, stood at 122 million euros in the first half of the year thanks to improved investee results, versus a loss of €24 million in H1 2020.
• The bank has supported a series of initiatives to mitigate the severe Covid-19 crisis, participating in ICO-backed loans for companies and the self-employed and sector-specific payment holidays, including 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, which covered almost 6,000 transactions totalling 1.56 billion euros, of which over 50% of the total transactions and 34% of the total volume took place in the Balearic Islands.
• In keeping with its strategy and business model, Banca March has created the best training facility for wealth management and corporate advisory professionals in the Spanish banking sector, a clear reflection of its philosophy of shared growth. The bank's efforts in people management have garnered prestigious recognition from top HR sector consultants: it is the only Spanish bank to boast both Top Employer and Great Place to Work® certification. Banca March is one of the 10 best companies to work for in Spain and the only Spanish bank to rank among the best places to work in Europe, according to the latest rankings compiled by GPTW®.

Banca March continues to boast robust financial and capital ratios with CET 1 capital of 18.37% at the end of March, the highest in the Spanish banking sector and one of the strongest in Europe. The bank also has the lowest NPL ratio in the Spanish financial sector at 1.62%, even without having resorted to large-scale discounted NPL portfolio sales, versus a sector average of 4.4% according to the latest Bank of Spain data. The bank's liquidity levels – LCR (233.0%) and DTL (137.8%) – and NPL coverage ratio (66.0%) are also among the highest in the sector.  

The consolidated net profit of Corporación Financiera Alba (CFA), of which Banca March owns 15%, stood at 122 million euros at the end of June thanks to improved investee results, versus a loss of 24 million euros in H1 2020. 

In August 2021, the credit rating agency Moody's ratified its A3 rating of Banca March's long-term deposits with a "stable" outlook, one of the best ratings in the Spanish financial system, ahead of the Kingdom of Spain (currently rated Baa1). 

In keeping with its strategy and business model, Banca March has created the best training facility for wealth management and corporate advisory professionals in the Spanish banking sector, a clear reflection of its philosophy of shared growth. Banca March places people and their professional development at the core of its strategy. As a result of this philosophy, over the last two years Banca March has obtained GPTW® certification, in addition to the Top Employer certification received in 2019, 2020 and 2021. This year, Banca March also featured for the first time on the list of the Best Workplaces in Spain by Great Place to Work®, ranking in the Top 10. It is the only Spanish bank to have made the prestigious list of 50 companies, clearly positioning it as one of the Best Companies to Work for in Spain. 

The bank was also the only Spanish bank to make it onto the list of the 75 Best Workplaces in Europe 2021, also compiled by Great Place To Work®. 

Banca March CEO José Luis Acea said: "These results pay testimony to the effectiveness of Banca March's unique business model, which is underpinned by robust financial and capital ratios, exclusive products and outstanding quality service provided by professionals trained at the sector's best private banking training facility. We remain utterly committed at all times to shared growth, the cornerstone of our century-old philosophy; a philosophy which means our management approach must contribute to an inclusive, sustainable economic model whilst remaining profitable for our stakeholders. Banca March seeks responsible returns with an impact for all stakeholders, including customers, employees, shareholders and society as a whole." 

Committed to sustainability

Banca March's commitment to sustainability is evident in every area of its activity. Banca March is a Signatory to the UN Global Compact, the world's largest corporate sustainability initiative. Along with 690 Spanish organisations and 1,590 worldwide, it seeks to align its objectives with policies and programmes that support partnerships with governments, civil society and the private sector to achieve the goals set out in the United Nations 2030 Agenda. 

As well as using its resources sustainably, Banca March also seeks to promote investment in sectors with effective environmental management strategies in place. For over 90 years, in keeping with its unwavering commitment to seeking shared growth with customers, employees, shareholders and society as a whole, Banca March has harnessed transformation processes to generate growth opportunities and new ways of investing and saving responsibly. The bank's commitment to responsible, sustainable investments is part of its vision of a new cycle that will be heavily influenced by technology, digitalisation and sustainability.  

In recent years, the bank has rolled out innovative, alternative investment and financing solutions which seek to offer the perfect blend of sustainability and performance:

• Mediterranean Fund: In 2019, March AM, Banca March's asset management arm, launched Mediterranean Fund, which donates 10% of the management fees generated to marine ecosystem conservation and recovery projects.
• Sustainable, Responsible Investing: Banca March works with the Swiss group J Safra Sarasin, a global leader in sustainable investment, and Robeco to offer its customers access to impact investment products.
• Impact Investing: with Amundi-CPR, an investment boutique specialising in impact investing, the bank has launched an equity vehicle which evaluates the expected impact of the investment on the environment and on society as a core investment criterion.
• Energy transition: in partnership with Tikehau Capital, Banca March offers its customers the chance to invest in the energy transition.
• Sustainable infrastructure: through the sustainable investment manager Mirova, Banca March clients have invested in six hydroelectric plants in Portugal.
• Next Generation: this strategy allows investors to gain exposure to three megatrends that the bank has identified as a potential source of returns over the years ahead: Industry 4.0, Sustainability and the Environment, and Demographics and Lifestyle.
• Sustainable financing: Banca March has signed sustainable financing agreements worth a total of 420 million euros in recent months, and its Asset Financing Solutions Unit is undertaking energy efficiency projects with hotel companies.

Innovative wealth advisory services

The specialist Private Banking and Wealth Management areas delivered highly positive performances, with assets under management up 20.0%, business volume up 17.5% and customer numbers up 19.3%.

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.

Assets under management by Banca March through Discretionary Portfolio Management (DPM) were up 71.5% year on year at the end of June, totalling 1.72 billion euros. Customer numbers increased by 82.5% over the same period to total over 5,200 contracts. The assets under management in delegated portfolios through the Next Generation strategy, an investment proposal based on global megatrends identified by the bank's team, posted particularly strong growth of 164% year-on-year to stand at 560 million euros at the end of the first half of the year.

The Next Generation investment strategy is channelled through a range of different products and services: Discretionary Portfolio Management (DPM) services, the fund of funds March Next Generation F.I., an individual systematic savings plan, PIAS Next Generation Unit Linked, and the pension plan March Next Generation P.P. Inspired by global megatrends, Next Generation was launched in 2019 in DPM format and invests in a portfolio of funds with a medium to long term outlook, pinpointing three trends which are transforming society and the economy: Industry 4.0, Sustainability and the Environment, and Demographics and Lifestyle. The strategy aims to harness the changes taking place in the world to generate returns and identify winning investments. The strategy returned 30.11% in 2020 and has generated gains since inception of over 100%.

The alternative investment proposals added to the bank's range of solutions in 2019 through partnerships with K2 Advisors-Franklin Templeton (DPM) and Banque Syz (fund of funds) had attracted total assets under management of over 300 million euros at the end of H1, up 140% versus June 2020. The latest addition to these alternative solutions was the March Alternative Strategies fund of funds, launched by March Asset Management in coordination with Banca March through the alternative investment advisory agreement with K2 Advisors- Franklin Templeton.  March Alternative Strategies affords conservative investors access to a diversified portfolio of vehicles specialising in Long Short Equity, Global Macro, Credit/Relative Value and Event Driven strategies. This product had generated total assets under management of 80 million euros at the end of June.

Co-investment continues to be one of the hallmarks of Banca March. Co-investment initiatives allow Banca March customers to invest alongside the Group's shareholders in real economy, illiquid investments, harnessing the potential of a century's real economy investment experience. In 2021, co-investment projects have been undertaken for a total of 32 million euros, with the total investment for the full year expected to stand at almost 250 million euros.  In the second quarter of the year, Banca March offered investors the chance to invest in Impulsa I through Oquendo Capital, a solution focused on alternative financing and supporting growth for Spanish companies.

Certain co-investment project divestments also took place in the first half of the year. Artá II divested Alvinesa following a highly successful investment in the company, which specialises in producing natural grape-based ingredients. Following its refinancing, Oquendo III divested tile company Equipe, and Oquendo II sold its position in Caiba. As regards projects in the investment phase, in the second quarter of the year transactions were completed worth 20% of the capital committed by Banca March and its customers.

The Sustainable and Responsible Investment (SRI) strategy launched in tandem with J. Safra Sarasin and the impact investing strategy with Amundi-CPR also maintained the outstanding inflows registered since their launch in Q4 2020, with a combined AUM of 135 million euros at the end of June, up 22% versus March this year. The latest addition to the ISR/Impact Investment range this year was the fixed income fund Robeco Global Climate Bonds, which seeks to reduce the carbon footprint of the issuers comprising its portfolio and had assets under management of 45 million euros at the end of June.

With global assets under management of over 5.20 billion euros at 30 June 2021, March Asset Management (AM), is the Group's asset management arm and one of its strategic business lines. March AM ranks fourth in the Spanish market by assets under management in SICAVs, with a total of 2.18 billion euros under management in these vehicles at the end of March. March A.M.'s three institutional SICAVs are traditional liquid co-investment products and one of the hallmarks of Banca March. Torrenova is Spain's largest SICAV, with 922 million euros under management at March this year. It was created over 20 years ago as an investment vehicle for the bank's shareholders and 4,345 customers currently hold investments in the fund. Bellver (360 million euros in AUM and 2,562 shareholders) and Lluc (218 million euros in AUM and 1,375 shareholders) complete this group of products.  

The three fixed income funds outperformed, with gains of 30.26% for Fonmarch, 908.55% for March RF Corto Plazo and 10.76% for March Patrimonio RF. All three are in the top quartile in their respective categories and the latter two are among the top 10 performers among their peers. 

Among March A.M.'s equity funds, Mediterranean Fund put in a particularly strong performance with gains of 16.84% in the first half, closing the period at over 109 million euros. Since its launch in September 2019, the fund has generated a total positive return of 38.1%. March Iberia also outperformed, with gains of 12.9% in the first six months of 2021. 

The bank of choice for family businesses

In Corporate Banking, Banca March's activity is geared towards companies, family businesses and business-owning families, specialising particularly in alternative financing, direct lending, customised treasury solutions and risk hedging. In the Large Companies Unit, business volume was up by 5.7% versus Q1 2020, lending was up 5.9% and assets under management grew by 21.9%. 

Banca March is committed to offering support and advisory services for family businesses in the process of expanding internationally. Banca March's International Business activity continues to enjoy robust growth, as reflected by the 175% increase in off-balance sheet assets under management (guarantees and letters of credit) in the first half and the 19% jump in customer numbers since December 2020. 

The bank has supported a series of initiatives to mitigate the severe Covid-19 crisis, participating in ICO-backed loans for companies and the self-employed and sector-specific payment holidays, including 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, which covered almost 6,000 transactions totalling 1.56 billion euros, of which over 50% of the transactions and 34% of the total volume took place in the Balearic Islands. 

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. In the first half of 2021, the bank placed in excess of 2.8 billion euros in short-term instruments (MARF and ECP commercial paper) through the programmes in which it participates, 40% more than in the first half of 2020. In the first six months of the year, Banca March also obtained an increase in targeted and placed volumes of medium-term bonds of more than 126% versus the same period of 2020. 

In Equity Capital Markets (ECM), the bank continued to focus on trading blocks of shares, as well as IPOs and capital raisings. In the first half of the year, new ECM mandates were obtained and transactions completed, further developing a line of activity which was launched by the bank in 2018. 

Banca March also participated in syndicated and club financing deals representing a total aggregate volume of over 2 billion euros in the first half of the year. The bank remains fully committed to prioritising ESG financing.

BANCA MARCH - CONSOLIDATED GROUP

INCOME STATEMENT	30/06/2021	30/06/2020	Change
			Amount*	%
Net interest income	73.2	75.6	-2.4	-3.2%
Gross income	214.8	192.2	22.6	11.8%
Operating income	52.5	55.4	-2.9	-5.2%
Attributable profit	42.9	37.5	5.4	14.4%

*In €m   

BALANCE SHEET	30/06/2021	30/06/2020	Change
			Amount*	%
Loans & advances	8,567.5	8,744.8	-177.3	-2.0%
Total deposits	11,220.0	10,579.6	640.4	6.1%
Customer deposits	8,700.0	8,580.8	119.2	1.4%
Equity	2,003.8	1,912.6	91.2	4.8%
Total assets	17,339.9	16,962.1	437.8	2.6%

*In €m  

 

KEY RATIOS

NPL	30/06/2021	30/06/2020
NPL Ratio	1.62%	1.73%
NPL coverage ratio	66.00%	51.74%

Capital	30/06/2021	30/06/2020
Capital adequacy ratio	18.37%	15.97%
Tier 1	18.37%	15.97%