Bankinter will offer its 2021 accounts to the market this Thursday and consensus projections point to a profit of 1,307 million euros, the largest in its history thanks to the capital gains generated by the sale of Direct line.
Earnings would be 312 percent higher than the 317.1 million euros it earned in 2020 yel 137 percent more than the 550.7 million earned in 2019, the year before the outbreak of the coronavirus.
The year-on-year comparison is marred by the impact of the coronavirus on the 2020 accounts, which forced Bankinter to provision 242.5 million euros due to the pandemic.
The reference is 2019 and according to estimates released by analysts and compiled by Bloomberg point out that, discounting Línea Directa, profits remain below the year before the pandemic.
Bankinter looks to 2023 to recover pre-pandemic benefits
Bankinter would thus earn 386 million euros, 29.9 percent less than in 2019, year in which it recorded the highest profit in its history after seven consecutive years of improved profits. Streak that broke the Covid-19.
The impact of Línea Directa, both its sale and its contribution to the group, was evident in the presentation of results for the first nine months of 2021.
The segregation of the insurer left 895 million euros in the coffers and without this amount, the profit was 20 percent lower than in 2019, a year that was impacted by an extraordinary 57 million euros from the purchase of Evo Bank.
In addition, since this year, Línea Directa has not contributed anything to the group’s profit and in 2019 it also computed the integration of Avantcard from May 31.
Bankinter pointed out in the presentation of its latest results that in 2023 it will earn more than in 2019, but the first forecasts released by analysts indicate that in said year it will not yet reach the 550.7 million profits achieved the year before the coronavirus.
Investors will look at interest margin
Investors punished Bankinter on the same date for the figures presented in its interest margin, 995 million euros, 3 percent more than in 2020, but below what was expected by the consensus.
The estimates consulted by finanzas.com show an interest margin of 1,273 million euros for the whole of 2021, 6.92 percent more than in 2019.
Bankinter already improved this game in 2020, despite the coronavirus and the downward interest rate framework, and return on equity, known as ROE, would also continue to improve.
The metric fell to 7 percent in 2020 due to Covid-19, but Bankinter would improve it to 10.88 percent this year, according to consensus, still below the 13 percent of 2019.
The capital ratio, stable
On the other hand, the “fully loaded” CET 1 ratio, which serves the market to gauge the quality of the solvency of a banking entity, would improve compared to 2019 by closing 2021 at 12.10 percent from 11.61 percent of that year and above the entity’s target of 11.5 percent.
It would thus be on average with the rest of the great Spanish banks and above the minimum established by the European Central Bank (7.68 percent), which lowered the demands of entities due to the impact of the pandemic on their financial statements.
The great incentive for Bankinter’s results already in 2022 would be the increases in interest rates by the European Central Bank.
The increases would improve all banks, but the latest reports published by investment firms such as Barclays point out that Bankinter, together with caixabank, is the most type-sensitive entity and the one that would most notice it in results.
Furthermore, according to the latest report from Morgan Stanley a 10 basis point rise in interest rates would be enough for a bank’s profit to rise 4 percent.
As challenges for Bankinter, Barclays points out that it must be able to derive the record levels of family savings to products such as funds or insurance from deposits and accounts and also outside of classic businesses such as mortgages.