The Annual General Meeting of Shareholders of Unicaja Banco has approved today the Board’s management and the annual accounts for 2019, and it has addressed the year results and milestones, as well as the measures adopted in the current situation of health crisis caused by the coronavirus pandemic.
Likewise, at the Shareholders’ Meeting, it has been shown that Unicaja Banco faces the current situation from a position of commitment and financial strength, which will allow it to support its customers in the current difficult context, to respond to the coming changes in the society and to look towards the future as a solid business project.
The Chairman of Unicaja Banco, Manuel Azuaga, remarked in his speech that the Spanish economy and society are undergoing an unprecedented challenge, and, convinced that banking must be part of the solution, he added that the company is facing this situation from commitment and closeness to customer, its characteristic values, but also ‘from a position of sound solvency and financial strength, based on a trajectory and management and collective performance which has allowed the bank to overcome past crisis and to maintain its autonomy and independence as a business project, something that is especially relevant in uncertain moments like the present ones. We are convinced that, thanks to that collective effort, we will successfully overcome the exceptional situation that we are now living and the huge challenges that we face’.
Azuaga stated that ‘at Unicaja Banco we are aware of the impending deep social change, and we believe that we can address the role that this emerging society demands from us’, taking into account that the change compels financial institutions to make an effort to anticipate to adapt its services to the needs of citizens, companies and institutions. In that sense, he referred to the existence of a widespread conviction that ‘we will find a quite different society’ when the pandemic stops and the lockdown is left behind: more technologically advanced (with a higher relevance of telework and online shopping), with greater solidarity, with globalization under review and where the mutualization demand between the countries of a same area is going to be growing. ‘A society in which the public and private sectors are called to intensify their collaboration to meet efficiently the social demands’, he added
The Shareholders’ Meeting, due to the health crisis, has been held through telematic means, without the attendance in person of shareholders and proxies, has registered an attendance quorum of 81.29% of the share capital, with an almost unanimous support to the proposals addressed. Before dealing with the items on the agenda, the Chairman expressed his condolences for the deceased due to the Covid-19, with a special mention to the bank’s manager Mariano Anaya, and sent a message of encouragement to those suffering the disease.
He also took the opportunity to thank the bank’s staff for their effort and commitment in this health crisis, highlighting the closeness and efficiency with which they are helping customers to manage their needs and to face the difficulties caused by this situation.
The Chairman also expressed gratitude and appreciation to those people maintaining the essential services in the current state of alarm, including banking employees.
Strategic Plan and dividend in the new scenario
The Institution has received a majority support of shareholders, who have endorsed the 2019 management, ‘a year -as said by the Chairman of Unicaja Banco- in which the bank has faced many challenges, both internal and external, and has shown an ability to cope which has allowed to place the bank in the first positions in solvency and liquidity ratios’. He added that thanks to the said position ‘we can look forward to the future with a solid business project, able to set its own roadmap but which, within the framework of the new Business Plan, necessarily has to adapt to overcome the challenges’.
The year 2019 was also marked by the approval of the Strategic and Transformation Plan for the period 2020-2022, digital transformation and commercial dynamism, among other topics. In that sense, the Strategic Plan will be reviewed and adapted to the new scenario arising from the Covid-19 crisis, maintaining the bank’s values, especially closeness and confidence in the service and commitment to society, as expressed by the Chairman at the Meeting.
Unicaja Banco Shareholders’ Meeting also ratified the appointment and designation of a new independent director, with a technology profile, María Luisa Arjonilla López, and the re-election of the company’s account auditor.
With regard to the initial agenda of the Shareholders’ Meeting, the proposed resolutions to distribute dividends charged to the profits of the year 2019 and to reduce the share capital by the buy-back of own shares had been previously withdrawn from the agenda. Such decisions were adopted in the exercise of responsibility and best corporate interest and following the recommendation issued by the European Central Bank (ECB) to the sector, to suspend that type of transactions at least until 1 October, due to the health crisis and with a view to promote the action of banks as key players in the recovery of the economy and to strengthen their solvency. As announced on 7 April, those items will be addressed in a new General Meeting of Shareholders expected to be held in October, taking into account the current circumstances.
Measures adopted to address the Covid-19 crisis
In his speech at the General Meeting of Shareholders, the Chairman of Unicaja Banco, Manuel Azuaga, expressed that ‘in face of the abrupt outbreak of such an unforeseen and unknown event as the coronavirus pandemic and given its rapid worldwide spread’, the bank has been working continuously ‘before and after the declaration of the sate of alarm by the Government of Spain, in the establishment of action protocols which have allowed us to face an unprecedented situation and to ensure the provision of the service to customers in an efficient and responsible manner’.
Azuaga explained that in this scenario, Unicaja Banco has set several permanent monitoring committees, within the bank’s business continuity plans, to respond to the circumstances and needs of each moment.
For the bank, the safety and protection of employees is also a priority, along with ensuring the provision of the financial service, regarded as essential in the state of alarm. In this sense, it has adopted a set of measures, adjusting the staff required to attend at branches and to perform the tasks of central services, promoting telework, as explained by the Chairman.
Additionally, in collaboration with the authorities and within the framework of its commitment to customers and society, Unicaja Banco participates in the measures to give liquidity and funding with guarantee of the State and of the Junta de Andalucía to companies and freelancers, moratoriums for mortgages and other loans and exemption or deferral of the payment of rent for people in a situation of vulnerability. The Chairman has also reminded that the bank has advanced the payment of unemployment benefits and pensions, among other measures to support those in a situation of vulnerability and to adapt to the needs of customers.
In relation to the global coronavirus pandemic, the Chairman of Unicaja Banco affirmed in his speech at the Shareholders’ Meeting that ‘we face an unprecedented health, economic and social situation, of unknown dimensions, which, in the exercise of our individual and corporate responsibility, requires the best response from all of us’. ‘Financial institutions must contribute to overcome this challenging situation, complying our mission, as it is the case of maintaining essential services for the society’, he said.
Main corporate milestones during 2019
The Chairman made reference to the main milestones in 2019. In addition to the appointment as CEO of Ángel Rodríguez de Gracia, he mentioned the successful execution of the subordinated debt issue carried out in November within the MREL and capital requirements; the reduction of non-productive assets, which has resulted in an improvement in the balance sheet quality; the development of an efficiency plan ‘to be able to compete properly in a market in ongoing transformation’; the successive adaptations to the regulatory requirements; the permanent update of the Corporate Governance System and of the different corporate policies, in the search of excellence in this matter; the development of the digital transformation process, and finally, the approval of a new Strategic and Transformation Plan for the period 2020-2022. In this sense, Azuaga remarked that ‘however, unavoidably, the said Plan will have to be reviewed and adapted due to the new general economic situation resulting from the Covid-19 crisis, maintaining all of our values and, especially, closeness and confidence in the service to our customers and commitment to the society’.
Financial strength in the annual results
With regard to the financial results of Unicaja Banco in 2019, the Chairman said in his speech that 2019 has been a year characterized by the improvement in the activity results and in the Institution’s indicators. He reminded that the group achieved a net profit of 172 million euros, a 12.9% increase over 2018, in contrast with the sector variation, down 13%.
He explained that the result improvement is underpinned by the increase in the gross margin, the decrease of the operating expenses and the sales of undertakings in companies, as well as in a reduced need for impairments for non-productive assets, as well as the provision of funds for 230 million euros to improve future profitability.
In relation to the financial and economic indicators of the Institution, Azuaga remarked the improvement of the solvency levels, with capital ratios among the highest in the sector, which comfortable exceed (1,578 million in CET1 and 1,121 million in total capital) the requirements set by the ECB within the SREP (Supervisory Review and Evaluation Process).
He also underscored the sustained reduction in non-productive assets, with a fall in the exposure over 1,100 million euros, and the maintenance of high coverage levels (58%) of non-performing assets and foreclosed assets, which have been reinforced, ‘being the highest in the sector and (those assets) representing only 1.8% of the total balance sheet’, as he affirmed.
Likewise, Azuaga remarked the increase in commercial activity and capacity, reflected in a sustained increase in performing and profitable credit and of those resourches which generate higher profitability, as well as the excellent liquidity levels (14,000 million euros, 25% of the balance sheet) and a high degree of financial autonomy.
Finally, the Chairman of Unicaja Banco highlighted the solid capacity to generate results, which, together with the solvency levels and the balance sheet quality, had allowed the bank to present to the General Meeting ‘a proposal with an important increase in the profit allocated to the payment of dividends’. ‘However, due to the current situation and following the ECB guidelines, the payment decision has been deferred until there is a higher visibility of the crisis effects. In a new general meeting, the Board will submit a proposal to allocate profits according to the circumstances of the moment’, as he explained. He also added that in the current situation, the institution has also decided to deactivate the variable remuneration schemes established for the managing staff.
Likewise, Azuaga remarked that the ‘high levels of capital, non-productive assets coverage and liquidity, as well as the extraordinary funds constituted in the year allow us to support customers in these difficult moments’.
The Chairman also mentioned that Unicaja has continued developing in 2019 actions in the exercise of its Corporate Social Responsibility (CSR), mentioning the renewal of the participation in the Social Housing Fund (Fondo Social de Viviendas, FSV); the inclusion of sustainable finance in one of the axis of the Strategic and Transformation Plan, and the commitment acquired, on the occasion of the UN Conference on Climate Change (COP25), held in Madrid in December, to proceed to reduce the carbon footprint of the credit portfolio. In the area of financial education, the bank maintains its support to the Edufinet Project, aimed at improving the financial literacy of citizens.