Bankinter (BKT) Q2 2024 earnings summary

Executive summary

• Net profit rose 13.3% year-over-year to €473.5 million, driven by strong commercial activity, diversified growth across all geographies, and improved efficiency.

• Achieved above-market growth in loans, deposits, and off-balance sheet funds, with sustainable market share gains and a consistent value strategy.

• Return on equity reached 17.7%, with tangible book value per share up 11% year-over-year and a 6.4% dividend yield.

• Outperformed sector growth in Spain and Portugal, with significant market share gains and robust expansion in Ireland's mortgage business.

• Cost-to-income ratio improved to 34.1%, maintaining sector leadership in efficiency.

Financial highlights

• Net interest income rose 9% year-over-year, supported by volume growth and stable customer margins, despite a 20 bps decline in Euribor.

• Net fees increased 13% year-over-year, driven by strong performance in asset management, brokerage, and transactional activities.

• Gross operating income reached €1.41 billion, up 10.4% year-over-year; operating expenses grew 6%, maintaining positive operating jaws.

• Cost-to-income ratio improved to 34.1% (YTD), with best-in-class efficiency.

• Loan loss provisions totaled €176 million, with cost of risk at 40 bps, at the high end of annual guidance.

Outlook and guidance

• Upgraded NII guidance to approach mid-single digit growth for 2024, supported by resilient margins and loan growth.

• Fee income expected to deliver high single-digit growth; costs to grow below income, ensuring positive operating jaws.

• Cost of risk expected to remain within 35-40 bps for 2024.

• Positive economic outlook for Spain and the eurozone, with GDP growth expected to accelerate in 2025 and 2026.

• Bank plans to integrate EVO Banco and expand digital transformation, aiming for further efficiency and profitability.