CaixaBank will close the year of its merger with Bankia with an exceptional profit, more than 5,000 million euros, which I had never achieved before and which will take years until I can return to similar levels, at least organically. Looking ahead to the coming years, the consensus expects its net result to normalize to levels of around 2,600 million euros in 2022 and another 2,900 a year later, once Bankia has been integrated into its structure. It is the fourth highest on the Ibex.
Since the announcement of the takeover, in September of last year, CaixaBank is trading 34% higher today, after falling 16% from the highs for the year, at 2.87 euros. Of course, the new entity has the best purchase recommendation of the Ibex bank and the second best in the Continuo, behind Unicaja.
In terms of valuation is who, Among the three large entities of the Ibex, it is listed at more attractive levels. The price of its shares includes a 45% discount on the value of its equity, which is higher than 40% for Banco Santander and 24% for BBVA. Both entities have used as a catalyst for their actions a renewed remuneration policy that includes the repurchase of shares, a point that CaixaBank has not confirmed, although it does not rule out. However, the merger has delayed this decision.
With the tailwind of a future rise in interest rates -which is also favored by high inflation-, the Catalan entity will be one of the biggest beneficiaries of an increase in the price of money, due to its profile much more linked to retail and mortgages than other banks. They have a 28% market share in this segment (Bankia contributes 12%). The entity calculates that each 100 basis points rise in interest rates in the euro zone represents an improvement of 20% on the net interest margin with an offset of one year.
“CaixaBank expects few or reduced corporate movements or new impacts on regulatory requirements” that may affect first-line capital, JP Morgan commented, and this “is what makes it feel comfortable in a CET1 fully loaded” 13%, when the minimum requirement of the authorities is 8.19%. CaixaBank closed the third quarter with an MDA cushion of 350 basis points of capital.
For now, the company has announced a payout 50% – versus the 30% in cash that it had stipulated before the pandemic. This implies that their remuneration reaches a profitability of 6% – with 0.14 euros expected by the consensus – and is the highest in the entire sector, not including the buyback of shares. In 2022, if the estimates are met, CaixaBank will exceed the pre-Covid dividend, with 16 cents per share.