The Annual General Meeting of Shareholders of Unicaja Banco resolved today to allocate 77.52 million euros to voluntary reserves and to reduce its share capital by 1.89% to redeem shares held as treasury stock. The bank maintains its intention to resume the payment of dividends, given its balance sheet quality and the sound solvency position, when it is permitted by the supervisor, as Unicaja Banco’s Chairman stated. In his speech, the Chairman also reviewed the milestones and results of the present financial year. The General Meeting, which has been held remotely, without the attendance in person of shareholders and proxies due to the current circumstances and following the health recommendations on the COVID-19 pandemic, is a continuation of the meeting held on 29 April and, as expected, it has dealt with the items that were postponed on that occasion.
With regard to the distribution of the net profit of the year 2019, following the ECB recommendation to the banking sector not to pay dividends until 1 January 2021, it has been approved to allocate to voluntary reserves the amount of 77.52 million euros, initially intended to be allocated to dividends with a charge to the financial year 2019.
The General Meeting has also given a green light to the share capital reduction of 30.5 million euros, via the redemption of own shares held as treasury stock, which represent 1.89% of the share capital and which were acquired under the buy-back programme that was cancelled following the ECB recommendations. The redemption will have no impact in terms of solvency, as the shares were held as treasury stock.
Unicaja Banco’s Chairman, Manuel Azuaga, stated in his speech that ‘the balance sheet quality and the solvency position of Unicaja Banco allow us to continue with our intention to resume remuneration to our shareholders as soon as possible, via the payout of cash dividends and buy-back programmes, as we were doing before the publication of the ECB recommendations’.
Mr. Azuaga expressed his support to and solidarity with those affected by the COVID-19, thanked the people who have worked to maintain the activity in the country and remarked the role of Unicaja Banco’s professionals in the support to the society and to the economic fabric.
Azuaga, after commenting the economic environment arising from the pandemic and after observing –as he did in the General Meeting held in April- that ‘we face an unprecedented health, economic and social situation’, indicated that the role of the financial sector in this phase of the pandemic ‘has been and remains to be essential, affirming itself as part of the solution to this crisis’, while ‘it is important that banks, within a framework of legal security, can preserve adequate levels of solvency, liquidity, efficiency and profitability’.
About Unicaja Banco, he said that ‘it is facing this situation from its commitment and closeness to customer, its characteristic values, but also from a position of financial strength, based on a trajectory of management and collective performance which has allowed the bank to overcome past crisis, something that is especially relevant in uncertain moments like the present ones’. As he said in the previous AGM, ‘thanks to that collective effort and to that position, we will be able to continue providing support to our customers in this difficult context, to successfully overcome the exceptional situation that we are now living and the huge challenges that we face, and to address the role that this emerging society demands from us, responding to the impending changes’.
In that sense, the Chairman of Unicaja Banco highlighted the importance of ‘intensifying the responsibility of citizens to generate diligently a common effort that will allow us to emerge as soon as possible from the difficult situation that we are going through’. He explained that, although a definitive solution to the crisis due to the coronavirus pandemic requires a health contribution whose time horizon is not clearly seen, ‘it is obvious that if we, as citizens, do our best to respect to the rules aimed at reducing the spread of the disease and if the companies use this context to advance in the area of the necessary technology improvements, and if the measures of economic support and boost applied by the government are optimized, there is no doubt that there will be a substantial improvement and that our society will be better prepared for a less compromised future which we all wish to reach as soon as possible’.
Main features of the bank’s evolution
At the General Meeting, Azuaga reminded that Unicaja Banco has been continuously working, during the first state of emergency and after that, on action protocols, ensuring service to customers and with a significant boost to digital banking and teleworking. The bank has also participated in the measures to give liquidity and financing to companies and to the self-employed, loan moratoria, and other measures for individual customers, such as the exemption and deferral of the rent payment to people in a situation of vulnerability, payment in installments of insurance premiums or the advance payment of pensions and unemployment benefit, in order to help the vulnerable and to adapt to the needs of customers.
Main recent milestones
In his speech at the Meeting, the Chairman covered the main milestones of the bank during the year. In that context, he referred to the announcement, by notice to the CNMV, of preliminary contacts with Liberbank, in the framework of the analysis of potential investment opportunities or corporate transactions that may be of interest for all its shareholders. He mentioned than on 8 October, the said body was informed that the Board of Directors had appointed the advisors for this possible transactions. And he confirmed that the contacts have continued, as well as the preparation of the corresponding analysis, although the Directors have not reached any agreement yet.
Additionally, Azuaga said that, regardless of the above, ‘the bank, from its positive trajectory and financial soundness position, continues to work on the implementation of its Strategic and Transformation Plan 2020-2022 which includes, among others, the transformation and commercial dynamism plans, designed with focus on the customer, as well as the development of advanced risk management models, with the important advantages arising from an improved risk assessment’. He reminded that the situation caused by the pandemic has made it necessary to review and adapt the plan in view of the new general economic situation resulting from the health crisis, ‘setting the focus on digital transformation, while maintaining the bank’s characteristic values and, especially, closeness and confidence in the service to customers and the commitment to society’.
Financial strength in the annual results
In his speech at the General Meeting, the Chairman of Unicaja Banco referred to the bank’s economic and financial trajectory, and said that, ‘from this point of view, the first six months of the year have been characterized by the capacity to generate result –which allows to offset the transitional negative impact of the COVID-19 on the core revenues-, by the growth in activity despite the difficult environment, the ongoing reduction of operating expenses and non-productive assets, which maintain high coverage levels, as well as the high solvency and liquidity levels and the reinforcement of the capital ratios. ‘Those parameters confirm Unicaja Banco’s strength to face the current situation –he added-, and to continue providing support to customer in the said difficult context’.
Azuaga remarked that profit, without the extraordinary provisions made in the context of the pandemic, would have reached 133 million euros, 14.8% more than in the same period of the previous year. The net profit stood at 61 million, after setting aside extraordinary provisions for 103 million, to face possible future impacts caused by the pandemic. Regarding the figures, he informed that the results for 3Q will be presented on 3 November.
Likewise, the Chairman of Unicaja Banco mentioned the approval by the bank, at the end of June, of an Action Plan on Sustainable Finance, to ‘reinforce the bank’s commitment to sustainability and to boost the integration of Environmental, Social and Governance (ESG) criteria into its business strategy’. The Plan comprises twenty measures, aimed at guiding the bank’s transition to a model including sustainability in the areas of business models and strategy, governance, risk management and information disclosure.