Even its rivals in Spain admit to feeling the impact last year as CaixaBank moved on from integrating Bankia to concentrating more exclusively on developing its business organically. This is evident, for example, in the savings market, where its customer funds increased by 3.1% in 2023. In insurance, a vital part of the group’s activities, there was also healthy growth, with a 7% volume growth in general and life risk premiums.
AfE 2024
There was further evidence to validate the premise of the merger with Bankia, which was that CaixaBank’s insurance and asset management expertise would help the firm realize synergies. The percentage of former Bankia clients with non-life insurance products, for example, rose to 14.8% in 2023, compared with 10.8% immediately after the merger’s legal completion in March. As the proportion among other CaixaBank clients is 20.2%, that still leaves room for growth.
Like all Spanish banks, CaixaBank is reaping the benefit of higher interest rates on lending margins. But in its case, this is coming from a bigger base, boosted by the merger with Bankia – something that was achieved with relative ease, perhaps because the two firms had a relatively clear cultural fit.
At the end of 2023, CaixaBank had a 23.5% share of lending to households and businesses in Spain, coupled with a 24.7% share of deposits, a 23.6% share of investment funds and a 36.5% share of savings insurance. Its net income grew by 53.9% to €4.8 billion in 2023. Return on tangible equity grew from 9.8% in 2022 to 15.6% in 2023, with the cost-to-income ratio falling from 50.3% to 40.9%. The non-performing loan ratio was stable at just 2.7%, while the cost of risk was just 0.28%.
In spring 2024, BBVA’s bid for Banco Sabadell raised the prospect of a new Spanish number two, leapfrogging Banco Santander in terms of market share of banking assets. Yet there was a sense in which BBVA’s return to the table – four years after Sabadell rejected an initial bid because of price and after Sabadell’s share price had risen much more than that of BBVA since 2020 – highlighted the good timing of CaixaBank’s deal, completed just before the interest rate cycle started to turn.
This doesn’t matter much to CaixaBank now. It will remain number one, with or without a BBVA-Sabadell merger.
“The integration of Bankia, which we finalized in 2022, has meant that in 2023 and 2024 we have been fully focused on running the business,” says chief executive Gonzalo Gortázar. “The bank has grown slightly faster than the market for decades and you have seen this again in 2023. During the integration, our growth was more moderate, in a context of low market growth. Now we are regaining our commercial strength.”