The Annual General Meetings of Shareholders of Unicaja Banco, held in Malaga in a mixed format (with in-person and online attendance), approved today, among other matters, with the support of a large majority of shareholders, the annual accounts and the management of the Boards of Directors during 2021, as well as the proposal to distribute a dividend amounting to €67.33 million with a charge to 2021 profit, which represents around 50% of the net consolidated profit of the year. The said dividend, scheduled to be paid on 8 April, adds to the €16.91 million dividend paid in 2021.
Likewise, the General Meeting of Shareholders approved the proposed partial renewal of the Board of Directors, with the incorporation of the proprietary director Rafel Domínguez de la Maza, representing Global Portfolio Investments (Grupo Mayoral), and of the independent director Carolina Martínez Caro, to cover existing vacancies, and the re-election of five directors due to end of their tenure in April. Thus, the following have been re-elected: the Chairman Manuel Azuaga, as executive director, and Juan Fraile, Teresa Sáez, Petra Mateos-Aparicio and Manuel Muela as proprietary directors. Additionally, the General Meeting approved other matters such as the delegation to the Board of Directors of the power to issue debentures (obligaciones), bonds and other non-convertible fixed income securities, up to a maximum amount of €3,500 million, as well as to develop a promissory notes programme, up to a maximum amount of €1,500 million.
In his speech at the General Meeting, Unicaja Banco’s Chairman, Manuel Azuaga, analyzed the current financial and economic environment, outlined the main milestones of the bank in 2021, among which he highlighted the merger with Liberbank and the approval of the 2022-2024 Strategic Plan. He presented the basic economic and financial keys of the year and the bank’s positioning to face the current challenges. In this line, he stated that ‘at Unicaja Banco we are aware of the great challenge ahead of us to consolidate our position as a financial institution of reference in the national financial system, and to respond to the expectations of this exciting project, in a context in which we face numerous and complex challenges. We are convinced that we have the means and the determination to overcome them adequately. We have a team of people who have demonstrated this ability during previous extremely adverse times’. The Chairman also added that ‘one of the main challenges that we have to meet is to continue to support people and the productive fabric while preserving our balance sheet, and at the same time we must continue to create value in order to offer a sustainable return to our shareholders. To this end, we continue to work hard to offer our best version to shareholders, investors, employees, customers and society in general’.
The bank’s CEO, Manuel Menéndez, explained the most relevant aspects of the Strategic Plan and analyzed in depth the business evolution and the annual accounts. In his speech, he emphasized that ‘one of the most important premises consists of extending the best practices of each of the two merged entities to the whole organization’. Additionally, he pointed out that ‘the capacity to generate recurring results, together with the levels of solvency and the balance sheet quality, allow us to present to this General Meeting a proposal to pay dividends for an amount of €67.3 million’, which means a pay-out close to 50%, with a charge to the ordinary profit of 2021. He also referred to the share revaluation, 22% in 2021. In relation to digitalization, the CEO pointed out that in the past year Unicaja Banco continued to develop the transformation strategy and that ‘the bank is working hard to advance in the process of incorporating the best digital functionalities and the provision of online and remote management services for all its customers’.
Merger with Liberbank, main milestone in 2021
This has been the first Annual General Meeting of Shareholders held since the materialization of the merger by absorption of Liberbank, in late July 2021, and approved one year ago by the shareholders’ general meetings of both institutions.
The Chairman of Unicaja Banco, Manuel Azuaga, stated that the merger with Liberbank was the bank’s main milestone in 2021, which allowed the creation of the of the fifth Spanish bank in terms of assets, with a large presence throughout the country and with a sound and high quality balance sheet. He remarked that ‘Unicaja Banco’s team continues to work hard with the goals of providing value to shareholders and stakeholders, boosting profitability, as well as to continue to improve the offering and quality of service to customers, and to continue to support the country’s economic recovery, preserving as shared values closeness and commitment to the territory’.
He explained that, since late July 2021, the bank has been developing integration works, preceded by a preparatory phase. He referred to a first phase in which the new organization chart was defined, the first efficiency measures were implemented -such as the staff restructuring plan, agreed with the workers’ representatives on 3 December and allowing the voluntary leave of 1,513 employees-, and the planning of operation and technology integration was defined. He also pointed out the boost to both the digital transformation strategy and the joint commercial and business capabilities.
2022-2024 Strategic Plan, sustainable finance, financial inclusion and dividend
Likewise, Manuel Azuaga referred to the 2022-2024 Strategic Plan, to its preparation and approval in 2021 in parallel to the integration works. He remarked that, based on the strengths of the starting position and the actions of the plan, Unicaja Banco has set the following objectives for 2024: growth of its performing loan portfolio; achieving an efficiency ratio of less than 50%; increasing off-balance sheet funds; reducing the NPA ratio; and generating capital, distributing to shareholders at least 50% of the profits obtained and maintaining a maximum quality capital target (fully loaded) of at least 12.5%.
He also highlighted Unicaja Banco’s positioning with regard to sustainable finance, a field in which the bank has continued to carry out sustainable and responsible banking actions in 2021, integrating sustainability into its own mid- and long-term strategy.
Regarding the challenge of financial inclusion, the Chairman of Unicaja Banco recalled the activities implemented through the financial education project, Edufinet, as well as the development of contacts with several Public Administrations for the analysis of different lines of action in financial inclusion, based on initiatives from previous years. And, in this line, he pointed out the bank’s support to the sectorial protocol to reinforce the social and sustainable commitment of the banking sector.
The CEO of Unicaja Banco, Manuel Menéndez, presented the most relevant aspects of the Strategic Plan and emphasized that ‘one of the most important premises consists of extending the best practices of each of the two merged entities to the whole organization’. He explained the Plan’s three lines of action: accelerating commercial activity through greater specialization, continuing to improve efficiency through the redesign and automation of processes and operational centralization, and advanced risk management with a conservative profile. ‘For the development of these three strategic lines, we will continue to promote digitalization, as a facilitator of the plan implementation, and we will keep sustainability very much in mind, as a relevant attribute of the current and future banking business’. He also pointed out that under this plan, it is expected to achieve a ‘relevant organic generation of capital, in the amount of around €1,500 million, which includes remuneration to shareholders, and to reach a return appropriate to our risk profile’.
In this regard, the CEO stated that achieving this profitability target ‘will allow us to adequately remunerate the bank’s shareholders on a recurring basis, and our ambition is to maintain a 50% annual pay-out. In fact, a pay-out of almost 50% is proposed at this General Meeting, to be charged to the ordinary profit of 2021’. He added that ‘the capacity to generate recurring results, together with the solvency levels and the balance sheet quality, allow us to present to this General Meeting a proposal to pay dividends for an amount of €67.3 million, to be paid in cash on 8 April 2022’.
In relation to Unicaja Banco's positioning in sustainable finance, Manuel Menéndez pointed out that ‘we aim for 75% of the assets managed in investment funds to meet ESG standards’, adding that in this area, agreements have been reached with benchmark suppliers to offer the bank’s customers energy services, discounts on the purchase of electric vehicles and the installation of photovoltaic panels and electric chargers, and that a new tool has also been launched to help SMEs and the self-employed to apply for European Next Generation EU funds, ‘which stand as a fundamental lever for recovery and economic transformation after the pandemic’.
Issues and financial soundness in 2021 accounts
The Chairman of Unicaja Banco also referred at the Meeting to the issues made by Unicaja Banco in 2021 and at the beginning of this year, which were ‘very well received by investors and which have been oversubscribed by both international and domestic investors, and which have contributed to consolidate the bank’s sound and comfortable solvency position’. In 2021, €500 million of AT1 and €660 million of senior preferred were issued, both of which are eligible in terms of MREL regulatory requirements. These issues were complemented by €300 million of subordinated bonds issued at the beginning of 2022.
He added that the institution has been working towards ‘strict compliance’ with the sectorial supervisory requirements and expectations, in areas such as SREP (Supervisory Review and Evaluation Process) solvency and the Action Plan on sustainable finance.
Regarding the 2021 annual accounts, the first accounts after the merger, the Chairman indicated that it has been a year in which the bank has strengthened its commercial momentum and consolidated the positive evolution of the improvement in the balance sheet quality, maintaining high solvency levels after the integration.
The CEO of Unicaja Banco, Manuel Menéndez, gave a detailed presentation on the different aspects of the bank’s business evolution in 2021, highlighting the strong solvency position reinforced with the new issues, the excellent liquidity levels, the increase in customer funds and the growth of performing credit. He also outlined the group’s balance sheet quality, with a loan portfolio with low non-performing loans ratio and high coverage, continuing with its strategy of ongoing improvement in the quality of investments, despite the adverse macroeconomic environment, as well as with a continued decrease in the stock of foreclosed assets and in non-performing assets, together with an increase in coverage levels, which are among the highest among Spanish banks. With regard to profit, he highlighted the 47% increase in net profit on a proforma basis, to €137 million.
Manuel Menéndez also referred to the evolution of the share in 2021, a year in which it has reached a 22% revaluation, ‘with the contribution of the improved economic outlooks and a more favorable evolution of loan quality than the one discounted by the market in the early stages of the COVID-19 crisis’, he explained.
With regard to the field of digitalization, the CEO of Unicaja Banco pointed out that in the past year the bank has continued to develop its transformation strategy, both in terms of operational and subscription improvements, and in terms of strengthening the open banking model and developing digital ecosystems through collaboration agreements with leading companies in different fields, areas that will be extended in the coming months to the all the bank’s customer base. As he explained, ‘the bank is working hard to advance in the process of incorporating the best digital functionalities and the provision of online services and remote management for all its customers, as well as the possibility of digital mortgage subscription’.