According to ECO, Novobanco recorded record profits of 638.5 million euros in the first nine months of the year, an increase of almost 50 percent compared to the same period last year, according to a statement sent to the CMVM this Thursday.
Explaining this performance - which allowed the bank that until recently was the biggest headache in the national system to record profits on a par with rivals BCP and Santander - is the increase in net interest income: interest income almost doubled to 831.2 million euros between January and September, fueled by the tightening of the European Central Bank's (ECB) monetary policy, which is making the cost of credit more expensive for families and companies.
Novobanco itself says that the increase in net interest income - which was 2.66% - is "a reflection of the improvement in the average interest rate on assets and a smaller increase in the cost of financial resources". In other words, while it has kept pace with the ECB's interest rate hike in the rate it charges for loans, it is slowing down in the rate it pays to depositors.
Commissions, on the other hand, stabilised at 217.1 million euros in this period. Overall, banking income grew 68.6 percent to 1,050 million euros.
Novobanco speaks of the "positive evolution of commercial activity, in an environment of rising interest rates" and adds that "this performance more than offset the effect of inflation and investment in improving the bank's processes, which led to an increase in operating costs of 8.1 percent".
Deposits Fall and Credit Stagnates
The loan portfolio also stagnated, reaching 25.7 billion euros at the end of September. Loans to companies shrank by almost 2% to 14 billion euros, but this drop was offset by an increase of almost 3% in loans to families to 12 billion euros, with a significant rise in consumer credit, which soared by more than 7% to 1.5 billion.
As for deposits, Novobanco suffered from the "same ills" as the other banks: it lost savings to Savings Certificates and the fact that many families used this money to speed up their home loan repayments to counteract rising interest rates. In the case of Lone Star's bank, total resources totalled 34.5 billion euros, down 0.7% on the same period last year, with deposits falling more than 1% to 28.1 billion.
Regarding capital levels, the CET1 ratio strengthened to 16.5 percent, well below the 12 percent threshold below which the Resolution Fund must inject money under the contingent capital mechanism. The solvency ratio is almost 20 percent.
And at a time when the bank is expected to be sold by the Americans Lone Star, shareholders' equity - an indicator often used in transactions - has grown to 4.2 billion euros.
Workforce
The restructuring of the bank in recent years has led to the departure of more than 3,000 workers between 2015 and 2022. However, 2023 was marked by a reversal in the evolution of the workforce, which increased for the first time. Novobanco now employs 4,209 workers, 119 more than it had at the end of last year.
Meanwhile, the commercial network maintained the 292 branches it had last December - almost half of what it had in 2015.