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Banca March posts earnings of €61 million, up 42% year to June, maintaining its sector-leading solvency position with CET1 of 17.30%

22 September 2022 Category: Results

  • The bank continues to boast the highest CET1 capital adequacy ratio (17.30%) in the Spanish banking industry and its LCR (232.89%), DTL (139.10%) and NPL coverage (76.36%) ratios are among the strongest in the sector.
  • Banca March continues to enjoy one of the lowest NPL ratios in the Spanish financial sector, even without having resorted to large-scale discounted NPL portfolio sales: at the end of June, the bank's NPL ratio stood at 1.47% versus a sector average of 3.88%, according to the latest data from the Bank of Spain.
  • Banca March's consolidated profit was up 42% to €61 million year-to-June on the back of a 10% increase in gross income and a 32% rise in operating income.
  • The business volume in the specialist Private Banking and Wealth Management areas stood at a total of €20.13 billion at the end of June, up 10% versus June 2021. Customer numbers were up by 10%, assets under management by 6.4%, lending by 34% and total business volume by 10%.
  • In the Balearic Islands, the Retail and Private Banking area, which accounts for the majority of the business in the region, posted a 13% increase in business volume and a 10% rise in customer numbers.
  • The Corporate Banking area continues to strengthen its leadership position in advisory services for medium-sized enterprises and family businesses. At the end of June 2022, Banca March remained at the top of the ranking of Registered Arrangers and Dealers for short-term MARF and ECP commercial paper programmes for Spanish corporate issuers. At that date, the bank had placed short-term MARF and ECP commercial paper instruments worth a total of €3.14 billion, up 9% versus June last year.
  • Banca March has become the first bank to digitalise its Private Banking model for the next generation of customers, who want high-tech investment management services offering greater autonomy. In June, the bank launched Avantio, the most comprehensive investment platform on the market, offering optimal omnichannel services whilst delivering the tailored, expert advice which is the hallmark of Banca March.
  • Thanks to its people management model, which is underpinned by training and specialisation, Banca March is now positioned as one of the best places to work and the best training facility for private bankers and business advisers in the Spanish banking industry. The consultancy Top Employers has recognised Banca March as a Top Employer four times now and GPTW has certified the bank as a Great Place to Work for three years running, as well as positioning it as the only Spanish bank to feature in its rankings of the best places to work in Spain and Europe in both 2021 and 2022.

Banca March's consolidated profit was up 42% to €61 million year-to-June on the back of a 10% increase in gross income and a 32% rise in operating income.

The bank continues to boast the highest CET1 ratio (17.30%) and among the strongest LCR (232.89%), DTL (139.10%) and NPL coverage (76.36%) ratios in the Spanish banking sector.

Banca March continues to enjoy one of the lowest NPL ratios in the Spanish financial sector, even without having resorted to large-scale discounted NPL portfolio sales: 1.47% at year-end 2021 versus a sector average of 3.88%, according to the latest data from the Bank of Spain.

The business volume in the specialist Private Banking and Wealth Management areas stood at a total of €20.13 billion at the end of June, up 10% versus June 2021. Customer numbers were up by 10%, assets under management by 6.4%, lending by 34% and total business volume by 10%.

In the Balearic Islands, the Retail and Private Banking area, which accounts for the majority of the business in the region, posted a 13% increase in business volume and a 10% rise in customer numbers.

In August 2021, the rating agency Moody's ratified its A3 rating for Banca March's long-term deposits with a stable outlook, one of the best ratings in the Spanish financial system, ahead of the Spanish government, which is currently rated Baa1.

Banca March CEO José Luis Acea said: "Banca March boasts the strongest fundamentals in the market, with robust capital adequacy, liquidity and coverage ratios affording protection for the assets of the savers and investors who place their trust in us. Our guiding philosophy has always been Shared Growth with shareholders, customers, employees and society as a whole. As such, we are unconstrained by short-term market pressures and offer our customers both an impeccable reputation and a robust business model delivering a responsible, prudent, long-term management approach. Our business model, which foregrounds customer relations and advisory services, is not constrained by circumstantial factors, as our unwavering goal is to generate long-term, sustainable value for our customers, adapting and innovating without losing sight of our core identity”.

The strength of a unique, inimitable business model

Private banking customers appreciate stability in their relations with their bank. Banca March boasts the strongest capital adequacy ratio in Spain, with CET 1 of 17.30% in June. However, it is not only the ratio itself that matters; total equity, which in Banca March's case stands at around €2bn, also affords security and peace of mind for customers.  Delivering the kind of private banking Banca March is committed to, on a par with major international financial institutions, requires an ecosystem of extremely robust solvency, close customer engagement with the bank and its values and a long-term approach which protects customers from short-term return pressures.

Avantio: optimal omnichannel services with expert advice

Banca March has become the first bank to digitalise its Private Banking model for the next generation of customers, who want high-tech investment management services offering greater autonomy.

To meet these new customer needs, the bank launched Avantio, the most comprehensive investment platform on the market, back in June. This new service positions the bank at the forefront of online banking, offering the strongest omnichannel provision whilst remaining fully committed to delivering the tailored, expert advice that is, and will continue to be, the hallmark of Banca March.

Avantio boasts the most advanced tools in the sector and features over 30,000 investment products by the world's largest asset managers. Its core features include a new, advanced search function for specific securities, funds and pension plans, instant access to Banca March's market strategy recommendations, real-time reporting on trading prices and an online reporting service offering customers clear, detailed, easily accessible information on their positions 24 hours a day, seven days a week.

The investment platform also allows customers to make their own investment decisions anytime, anywhere. Thanks to the online broker service, customers seeking greater autonomy and speed can implement their own investment decisions, always under the expert advice of Banca March.

The only Spanish bank to rank among the best companies to work for in Europe

Banca March's people management model, which is underpinned by training and specialisation, has positioned it as one of the best places to work and the best training facility for private banking and corporate advisory managers in the Spanish banking industry.

Banca March invests more in training per employee than any other Spanish bank: in 2021, it invested 920 euros per person, almost three times more than the sector average. The bank offers its professionals a working environment where they can build a long, rewarding career, always ensuring equal opportunities, professional development and a strong work-life balance. The bank's goal is to remain a high-performance, results-driven organisation underpinned by the ethical values of professionalism, competence, meritocracy and responsible banking.

This model has been endorsed by top global HR consultants. The consultancy Top Employers has recognised Banca March as a Top Employer four times now and GPTW has certified the bank as a Great Place to Work for three years running, as well as positioning it as the only Spanish bank to feature in its rankings of the best places to work in Spain and Europe in both 2021 and 2022.

This endorsement of Banca March's talent and people management policies offers further backing for its unique business model, based on leadership in solvency, responsible advice, an impeccable reputation, service quality, advisory technology and people management, with the best-trained professionals in the sector. The survey by Great Place to Work®, revealed that 9 out of 10 employees feel proud of their achievements as Banca March professionals and wish to continue working at the bank.

Advisory services for every investor profile

Banca March Group continues to spearhead innovation in private banking products, offering the sector's most comprehensive range of proposals for all profiles, from the most conservative saver to the most sophisticated investor: Co-investment, added-value discretionary portfolio management (DPM), alternative funds, private equity (March Private Equity), impact and socially responsible investing, themed funds (March Asset Management) and special long-term savings products for Private Banking and Wealth Management customers, such as the unit-linked products developed by March Vida.

The volume of assets under delegated management by Banca March, including Discretionary Portfolio Management and delegated funds, stood at €2.56 billion at the end of June, up 7% year on year. This growth is a clear reflection of the trust placed by customers in Banca March, despite the market instability observed since war broke out in Ukraine.

Specifically, assets under management through Discretionary Portfolio Management (DPM) were up 3% versus June 2021 to over €1.75 billion. The steepest increases in AUM were registered in the most adventurous portfolio (59%), followed by the defensive (26%), moderate (16%) and conservative (10%) portfolios. At the end of June, Banca March had 6,400 DPM contracts in place, clearly evidencing the trust placed in the bank by its customers.

Assets under management in Banca March's delegated funds at the end of the first half stood at €815 million, up 15% versus June last year.

Co-investment: the hallmark of Banca March

In its 100-year history, Banca March has weathered all kinds of situations and crises; that experience also underpins the bank's outlook and advisory proposals for its investors. The fact that Banca March is a wholly family-owned bank offers the utmost reassurance and confidence for its customers. This is clearly evidenced by the bank's extensive, decades-old tradition of investing in the same products as its customers, ensuring the greatest possible alignment of interests.

Co-investment continues to be one of the hallmarks of Banca March. These are illiquid projects that channel investment strategies in the real economy, where customers invest alongside the Group's shareholders and benefit from investment experience dating back a hundred years. In the first half of 2022, real economy investment projects were marketed for a total of €220 million.

With assets under management of €4.85 billion at 30 June 2022, March Asset Management (AM) is the Group's asset management arm and one of its strategic business lines. March A.M.'s three institutional SICAVs are traditional liquid co-investment products and one of the hallmarks of Banca March. Torrenova is among Spain's largest SICAVs, with €909 million under management at the end of June. It was created over 20 years ago as an investment vehicle for the bank's shareholders and 4,496 customers currently hold investments in the fund. Bellver (€338 million in AUM and 2,609 shareholders) and Lluc (€231 million in AUM and 1,487 shareholders) complete this trio of products.

New innovative, sustainable products

In line with the dynamic product innovation which is a hallmark of Banca March's advisory line, in the area of sustainable investing, 2022 saw the launch of delegated fund March Green Transition Bond and the Unit Linked Revitalización Europea, both of which are committed to protecting the environment and investing in sectors which support the ecological transition and digital transformation.

March Green Transition Bond is a multi-sector, diversified fixed income fund, created through the partnership between Banca March and Allianz Global Investors, with a jointly-designed investment strategy. It invests in long-dated bonds with a view primarily to financing projects which contribute to decarbonisation and the environment by helping companies and countries achieve their targets in the transition to a greener world.

Unit Linked Revitalización Europea is a pioneering, exclusive strategy by March Vida which combines liquid and illiquid assets in a single life-savings product with a minimum contribution of €25,000. The vehicle offers investors the chance to secure exposure to the businesses that stand to benefit the most from the deployment of the Next Generation EU funds, investing in the digital transformation, environmental transition and economic and social recovery.

Committed to mega-trends and alternative investments

Banca March's discretionary portfolio management (DPM) services, which offer unparalleled added value, were launched in 2018 to provide customers with a selection of open architecture products which are actively managed to generate returns against any market backdrop. The growth figures reported evidence the strong investor take-up levels driven by the outstanding results obtained.

Since its launch in 2019, the Next Generation strategy has put in a highly dynamic performance. This discretionary management proposal is based on global megatrends identified by the bank's team as key drivers of social and economic change: industry 4.0, sustainability and the environment, and demographics and lifestyle. Despite market turbulence, the Next Generation strategy has chalked up a return of 23% since inception. Aimed at customers with an adventurous profile, it is 100% invested in equity funds with a diversified portfolio underpinned by the principles that comprise the bank's entire philosophy: prudence, long-term goals and shared growth with customers, employees and shareholders.

Another route to this value proposition is through the fund of funds March Next Generation F.I., a megatrend strategy with a minimum investment of just one share.

The alternative investment solutions launched by the bank in 2019 through partnerships with K2 Advisors-Franklin Templeton (DPM) and Banque Syz (fund of funds) also continued to outperform. In addition to these solutions, the fund of funds March Alternative Strategies was launched by March Asset Management in coordination with Banca March under the alternative investment advisory agreement with K2 Advisors-Franklin Templeton. This product affords conservative investors access to a diversified portfolio of vehicles specialising in Long Short Equity, Global Macro, Credit/Relative Value and Event Driven strategies.

Recently, the range of alternative investment solutions has been reinforced with the launch of the fund Dynamic Alternative Strategies, designed in partnership with Dynamic Beta Investments (DBI), which tracks the performance of a basket of hedge funds, comprising the 50 largest funds in the Event Driven, Equity Hedge and Relative Value strategies and 20 CTAs (systematic global macro).

At the end of June, the combined alternative investment strategies managed by Banca March accounted for a total of €453 million in assets under management.

The impact and socially responsible investing (SRI) strategies launched with international fund managers such as Amundi-CPR have also posted outstanding inflows since their launch in late 2020, with a 11.5% increase in AUM to a total of €137 million at the end of June.

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. Business volume for the Large Companies unit was up by 10.2% versus 2021, assets under management grew by 217.5% and customer numbers rose by 7.5%.

At the end of June 2022, Banca March remained positioned at the top of the ranking of Registered Arrangers and Dealers for short-term MARF and ECP commercial paper programmes for Spanish corporate issuers. At that date, the bank had placed short-term MARF and ECP commercial paper instruments worth a total of €3.14 billion, up 9% versus June last year.  As for medium and long-term issuances, Banca March had actively participated in the placement of four bonds.

In Equity Capital Markets (ECM), the bank continued to focus on trading blocks of shares, as well as IPOs and capital increases.

Banca March also participated in syndicated and club financing transactions for a total volume of over €2 billion in the first half of 2022, of which €877 million had an ESG component.

BANCA MARCH - CONSOLIDATED GROUP

INCOME STATEMENT 30/06/2022 30/06/2021 Change
Amount %
Net interest income 62.3 63.0 -0.7 -1.1%
Gross income 235.9 214.8 21.1 9.8%
Operating income 69.1 52.5 16.6 31.6%
Attributable profit 60.7 42.9 17.8 41.5%

*Importe en millones €  

BALANCE SHEET 30/06/2022 30/06/2021 Change
Amount %
Loans and advances  8,623.4 8,567.5 55.9 0.7%
Total deposits 13,820.7 11,220.0 2,600.7 23.2%
Customer deposits 10,800.1 8,700.0 2,100.1 24.1%
Equity 1,938.5 2,003.8 -65.3 -3.3%
Total assets 20,573.2 17,339.9 3,173.3 18.2%
KEY RATIOS 30/06/2022 30/06/2021
NPL ratio 1.47% 1.62%
NPL coverage ratio 76.36% 66.00%
Capital 30/06/2022 30/06/2021
Capital adequacy ratio 17.30% 18.37%
Tier 1 17.30% 18.37%

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