Banca March earns 327 million euros in 2023, twice as much as a year ago

Banca March obtained a net profit of 327 million euros in 2023, 103% more than in 2022, a result that includes a capital gain of 89.1 million euros from the sale of the March RS insurance broker to Howden Iberia last year. Had it not been included, the bank would have earned 239 million euros, 55% more.

The bank highlights that the 2023 result was driven by the growth in banking activity and customer acquisition in the specialized areas (private and asset banking and corporate advisory services), as well as by the boost in the personal banking business.

Thus, total revenues (gross income) rose to 676.4 million euros, 36.7% more than in the previous year, while net interest income doubled from 187.2 million euros in 2022 to 381 million euros in 2023.

By business lines, the entity highlights that the volume of business in the private banking and wealth management areas advanced by 10% year-on-year and stood at 25.9 billion euros at the end of 2023 and assets under management increased by 13%, while credit investment fell by 3.8%.

In addition, Banca March highlights the 17% increase in the number of customers with assets over 500,000 euros compared to December 2022, with increases of 19.5% in net interest income.

In corporate banking, the entity recorded a 2.7% increase in customers and a 1.7% increase in assets under management. It also reported a 10.2% increase in customer funds, although there was a 6.1% fall in lending and a 0.7% drop in net interest income.

In this segment, Banca March highlights its activity in the promissory notes market in the MARF, where it maintains its "leadership" after participating in issues worth 7.5 billion euros in 2023. So far in 2024, the bank already has an outstanding balance in MARF promissory notes placed of 1,878 million euros, 45% of the total market.

Considering the rest of the fixed-income markets, the entity is also "consolidated" in the first position in the ranking of registered advisors or arrangers and placers of short-term debt for Spanish corporate issuers, having participated at the end of 2023 in a total of 65 programs (56 of MARF promissory notes and nine of ECP on the Irish Stock Exchange).

The entity also reported that in the Balearic Islands, the entity's home market, double-digit growth was recorded in business volume and number of customers, both in private banking (11.2% and 18.3%, respectively) and in personal banking (16.1% and 20.4%, respectively).

In terms of the balance sheet, the volume of loans closed 2023 at 8,675 million euros, up 178.9%, while customer deposits stood at 12,112 million euros, up 10.3%. The bank's total funds amounted to 14,577 million euros, up 6.3%, while equity was 2,324 million euros, up 15.7%.

Non-performing loans ratio at 1.88%.

As a result, the institution's CET1 solvency ratio at December 31 stood at 21.26%, while the NPL ratio closed at 1.88%, up slightly from 1.23% in 2022. In this regard, the CEO of Banca March, José Luis Acea, explained that this increase is mainly due to the fall in lending caused by the tightening of monetary policy, and not so much to an increase in non-performing loans.

However, the entity increased its provisions by 35%, up to 46.3 million, although Acea explained that this was due to an exercise of "prudence".

Acea also pointed out that the LCR liquidity ratio stood at 325.9% at the end of the year and the DTL at 168.1%, with a coverage of risks due to doubtful loans of 51.47%.

Thus, return on equity (ROE) stood at 13.58% at the end of 2023, a metric that was driven by the "growth in activity and the normalization of interest rates".

Investment in technology

The bank explained that customer growth was driven by the "strategic development" of digital and remote banking: revenues from March Broker increased by 22% in 2023 -- up 60% in the last two years -- while 42% of new personal banking customers are already captured by the Avantio investment platform.

"Banca March's commitment to technology and digitalization is embodied in an annual volume of spending and investment totaling E187.2 million between 2020 and 2023, equivalent to 10.31% of gross margin," the CEO explained. Acea pointed out that the bank closed the first year of its 2023-2025 three-year plan in 2023 with "strong profit growth from continuing activities", excluding the result of the sale of the March RS insurance brokerage.

Regarding the achievement of the objectives of the strategic plan, the bank explained that it had exceeded some of the targets set. Thus, it has exceeded the target of 40% increase in private banking clients and 16% in corporate banking, as well as the goal of reaching a CET1 ratio of 20%.

Acea explained that they are facing 2024 with"responsible optimism", although they see room for growth in their advisory model. He also stressed that the objectives set out in its strategic plan are "minimal" and ruled out that they will be modified, despite having been exceeded, given that there are "two years left. However, he said he was "convinced" that the solvency ratio "will continue to improve until the end of 2025".