The institution has received a majority support of shareholders, who have endorsed the management in a financial year marked by the completion of the integration of EspañaDuero and by the advances in the Business Plan 2017-2020, in digital transformation and commercial dynamism, among others.
The General Meeting of Shareholders has also approved the proposal to adapt the number of members of the Board of Directors, which will be composed by 12 directors.
The Annual General Meeting of Shareholders of Unicaja Banco has approved today the Board’s management and the annual accounts for 2018, the first full year as a listed company, as well as an increase in the dividend distribution. The institution has received a majority support of the shareholders, who have endorsed the management in a year marked by the completion of the integration with EspañaDuero and by the advances in the achievements of the Business Plan 2017-2020, in digital transformation and commercial dynamism, among other aspects, having achieved in 2018 some of the goals set for the whole period.
The Institution’s balance sheet quality and solvency make it to be two years ahead, in 2018, in the percentage of net profit allocated to the payment of dividends forecast in the IPO (40% for 2020). This means a dividend of 3.8 euro cents per share, vis-à-vis the 2.1 euro cents paid against the results of the previous year, a 76% increase.
Unicaja Banco shareholders have approved the proposal to adapt the number of members of the Board of Directors, which is now composed by 12 directors. The General Meeting of Shareholders has registered an attendance –in person or by proxy- of 83.47% of the share capital.
In his speech, the Chairman of Unicaja Banco, Manuel Azuaga, has remarked that ‘2018 has been the first full year that we have lived as a listed company’. A year during which, as he said, ‘the analysis and stress tests prove the robustness of Unicaja Banco and its position to face future scenarios and challenges’. He has also underscored the ‘huge job made by our institution, which allows it to be ready and to adapt to the new regulatory requirements’ which may have an effect on the sector.
Azuaga has also made reference at the General Meeting to the contacts between Unicaja Banco and Liberbank, as announced in a relevant fact (hecho relevante) on 12 December 2018. He added that they are moving forward in the usual aspects of this kind of processes. The President reminded that, as said in the mentioned relevant fact, these contacts take place within the framework of the analysis of prospective investment opportunities or corporate transactions that may result of interest for all the shareholders of the institution.
The Chief Executive Officer (CEO) of Unicaja Banco, Enrique Sánchez del Villar, has focused mainly on the boost to the Commercial Dynamism Plan (Plan de Dinamización Comercial) for the development of an offer adapted to the needs of customers and the strengthening of the online channels within the bank’s Digital Transformation Plan. He has also reviewed the key features of the bank’s financial evolution in 2018, such as the 21% growth in new lending to SMEs and individuals or the 0.9 p.p. reinforcement of the solvency, with a regulatory CET1 ratio of 15.4%.
At the beginning of his speech, the Chairman of Unicaja Banco has made reference to the macroeconomic environment where the Spanish banking system operates, as well as to the outlooks for 2019. He has added that banks are in a complex and changing context, marked by the impact of a large set of factors, both cyclical and structural, and by the proliferation of regulations with an impact in the banking activity.
Corporate governance, integration of EspañaDuero and Efficiency Plan
Among the main milestones of 2018, the Chairman has pointed out the new developments in corporate governance. The process of renewal of the Board of Directors, due to end of tenure, which took place one year ago and was approved by the previous General Meeting of Shareholders, has resulted in the incorporation of Ana Bolado, Manuel Conthe and Maria Antonia Otero as independent directors, and of Teresa Sáez as proprietary directors. In all the cases, they are renowned specialists and with a proven experience, as it is also the case of the proprietary director Manuel Muela, who joined the Board before.
‘These incorporations, together with the rest of the members who were at the Board before 2018, have allowed us to configure a highly qualified and diverse body, with a very complete competence and skill matrix, ensuring the best analysis and a well-reasoned decision-making in relation to aspects that are strategic for the future of our institution’, stated Azuaga.
Following the resignation as director of Eloy Domínguez-Adame, which took place in December last year, the General Meeting has agreed today to adapt the number of members of the Board of Directors, which is now composed by 12 directors, two of which are executive, five proprietary ad five independent directors, with a percentage of women of 41.6%.
Unicaja Banco’s Chairman has also reminded that in May last year it was agreed to set up a Technology and Innovation Committee, of voluntary nature, which joined the other four compulsory committees supporting the work of the Board: Audit and Compliance, Appointments, Remuneration and Risk Committees.
Another important milestone during 2018, highlighted at the General Meeting of Shareholders, has been the completion of the integration with EspañaDuero at the end of September 2018, in its legal, operational and technological aspects, after successfully and timely complying with the established roadmap. The merger by absorption of EspañaDuero allows the advance towards the direction set by the Strategic Plan 2017-2020, maintaining the commitment to the home regions (Andalusia and Castilla y Leon), where Unicaja Banco is leader, and to traditional areas of operation, as Castilla-La Mancha, Extremadura or Madrid.
The end of the said integration has involved the approval of the Efficiency Plan, which includes new goals of cost adjustments in order to materialize both the synergies resulting from the integration and those arising from the commercial and operational transformation plans. In relation to that, with a majority support of the trade unions, at the end of the year the bank closed the labor bargaining agreement (acuerdo de negociación laboral) for its staff, developed for efficiency reasons and in line with the rest of the sector. In this regard, a process of voluntary redundancies for early retirements and redundancy schemes has been regulated, to be implemented gradually during three years, and criteria for the application of internal flexibility measures have been established.
Advances in the Business Plan: digital transformation and commercial dynamism
Regarding the development of the Business Plan 2017-2020, which includes, among others, the plans for digitalization and commercial dynamism designed with focus on the client, the Chairman of Unicaja Banco has referred to the new model of commercial management and the changes made to the process to grant and monitor credit as ‘important levers’ in that line, as well as the adequate management in the area of non-productive assets.
He has also talked about the specific projects launched and related to the Business Plan, such as the System Plan (Plan de Sistemas), which involves having an efficient banking platform model for the future, and an organizational model dimensioned to integrate customers in an agile manner. The Digital Transformation Plan has the goal of facing the changes and adapting to the new technology scenarios of the financial system, with three key elements: digital marketing to generate business both in digital environments and in branches; full transformation of processes, and advanced analytics.
In this regard, the CEO has made reference to the developments in the digitalization strategy, focused on the needs of Unicaja Banco customers. In particular, digital users (those who have used e-banking in the three last months) account for nearly 30% of the total of customers. Also, pure digital customers -that is, those who only relate to the bank through online channels-, stood for 19% of the total as at December last year. 67% of the channel transactions executed during the last year were made through e-banking.
In addition to the previous plan, the Chairman of Unicaja Banco has referred to other developments, such as the new public website, as the ‘tip of the iceberg of the cultural change we are immersed in’, or to the Plan for the Management of Non-productive Assets, focused on the management of pre-arrears and in the acceleration of the process to manage foreclosed assets. The development of advanced models for credit risk management has also been highlighted.
The Commercial Reactivation Plan (Plan de Reactivación Comercial) is associated to the Business Plan, with projects focused on households, in consumption, and in businesses, aimed at the improvement of the commercial systematics. These projects are supplemented by initiatives aimed at agile processes, in the network of branches and in central services.
In particular, the CEO has said, in relation to the Commercial Dynamism Plan, that the goal is to foster and diversify business by developing an offer adapted to the needs of customers. So, new lending granted to SMEs and to individuals grew by 21% during the last year.
In the area of labour, Unicaja Banco has continued in 2018 with the training of its staff to obtain the certifications in financial advice and commercialization, in compliance with the MiFID II directive. A high percentage of employees related to the sale of financial products (80%) have achieved the said certifications.
Financial strength in 2018 accounts
With regard to the annual account (individual and consolidated), corresponding to the year 2018 and approved by the General Meeting of Shareholders, the following should be highlighted: the improvement of the solvency levels of Grupo Unicaja Banco; decrease in non-productive assets, while maintaining high levels of coverage; increase in new lending transactions to SMEs and individuals and high and comfortable liquidity levels.
In this sense, in 2018, Grupo Unicaja Banco obtained a net profit of 153 million euros, up 10.2% vis-à-vis 2017. The mentioned improvement is underpinned by the increase of 3.1% in the net interest margin, the decrease of 2.2% in operating expenses and by an important decrease of the needs of provisioning.
With regard to the persistent and accelerated decrease in non-productive assets, the reduction of 995 million euros (22%) is to be pointed out. The levels of coverage of those assets are among the highest in the sector, with a rate of 57.3% as at the end of 31 December 2018.
In terms of solvency, as at that date, Grupo Unicaja Banco had a CET1 ratio of 15.4%, and a total capital ratio of 15.7%, among the highest in the sector. In fully loaded terms, Unicaja Banco had a CET1 ratio of 13.5% and a total capital ratio of 13.7%.