In This Article:
Release Date: February 04, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Unicaja Banco SA (FRA:7UB) reported a significant increase in net profit for 2024, reaching 573 million, which is a 115% increase compared to 2023.
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The bank has successfully doubled its shareholder remuneration, with a final dividend of 7.4 per share, reflecting a 2.7 times increase year-on-year.
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Customer business volume improved by 2% over the period, driven by a nearly 5% increase in deposits.
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The bank has maintained a strong capital position with a CET1 fully loaded ratio of 15.1%, which is 40 basis points higher than Q4 2023.
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Unicaja Banco SA (FRA:7UB) has reduced non-performing loans (NPLs) by 18% and foreclosed assets by 28%, with an NPL coverage ratio increasing to 71%.
Negative Points
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The bank's credit volumes have slightly decreased despite stabilization in private lending.
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Commissions fell by 4% in 2024 as the bank focused on retaining customers and writing off non-value-adding commissions.
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Operating expenses increased by 5%, driven by personnel expenses and variable pay adjustments.
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The bank's lending book continues to shrink, particularly in the corporate segment, which remains a challenge for growth.
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There is ongoing pressure from fierce price competition in the mortgage loan segment, affecting market share and profitability.
Q & A Highlights
Q: With a capital ratio of 15%, why hasn't Unicaja Banco announced a share buyback program similar to last year? Are there any plans for inorganic operations? A: Unicaja Banco has increased its dividend payout to 60% and is committed to returning capital to shareholders. The bank is exploring tactical solutions to invest capital in tools, portfolios, agreements, and partnerships that could enhance profitability. There are no specific plans for inorganic operations at this time, but the bank is considering options that could yield better returns for shareholders. (Respondent: CEO Isidro Dral)
Q: What is needed to turn around the shrinking corporate business and achieve growth? A: The bank is focusing on increasing its share of wallet with existing clients by 25% and developing digital capabilities and products to grow in working capital. Unicaja Banco plans to hire over 300 specialists to enhance its corporate segment, particularly in the agro sector, and aims to progressively grow its lending book. (Respondent: CEO Isidro Dral)
Q: How does Unicaja Banco plan to achieve a 3% increase in business volume, and what impact will partnerships like the one with Pfizer have on the P&L? A: Growth will be gradual, with a focus on consumer loans and corporate lending. The partnership with Pfizer is expected to enhance capabilities, products, and customer experience, particularly for freelancers and SMEs, leading to increased income from fees. The bank aims to offer better products and services to improve customer experience and drive growth. (Respondent: CFO Pablo Gonzalez)