The bank raised its net interest income, thanks in part to a 17% increase in fee income.
freebank increased its net profit by 16.8% in the first quarter of 2021, to 23 million euros, after allocating another 38 million euros to provisions of credit to anticipate the impact of the deterioration of the macroeconomic scenario during the coming years and cover the increased risk of customers without defaults.
As reported by the entity to the National Securities Market Commission (CNMV), the improvement in margins in the income statement was caused by the commercial drive and the evolution of digital and remote channels.
The interest margin reached 125 million euros (+1.7% excluding the impact in the first quarter of 14 million non-recurring income), and income from commissions grew by 17.4%, to 59 million, thanks to the savings activity and investment funds.
The gross margin it remained stable, at 176 million (-0.8%). General expenses continued to be contained, with 86 million, and depreciation grew to 12 million (+13.5%), with which the operating margin reached 78 million euros, slightly below that obtained in the same period of the previous year. The cost of risk stood at 55 basis points, with the recurring cost being 14 basis points.
Liberbank’s balance sheet grew by 10.2%, to 47,287 million euros, with record increases in customer resources (+11%), up to 34,409 million euros, of which 27,227 million correspond to on-balance sheet resources (+8.8%) and 7,183 million to off-balance sheet resources (+20.3%). The deposits Demand savings increased by 13.6%, to 21,092 million euros, while term savings continued to decline.
The increase in off-balance sheet resources was motivated by the investment fund segment (+33.5%), with assets of 4,802 million euros and record net subscriptions of 311 million.
The outstanding credit balance increased by 10.7%, driven by mortgage financing, with a national market share of 6.7% in new formalities, amounting to 660 million euros.
freebank allocated 38 million euros to provisions of credit in the first quarter (+23.7%), of which 28 million were destined to anticipate the greater deterioration of the macroeconomic scenario and to cover the increase in the risk of customers without defaults.
The default rate fell to 2.89%, compared to 3.2% a year earlier, with a drop in the volume of foreclosed assets of 9.2%.
The portfolio of non-performing assets (doubtful and foreclosed) fell by 6.3%, which meant an improvement in the ratio of non-performing assets (NPAs) of 1.2 points, to 7%. The doubtful coverage ratio rose to 59%, 10.3 points more, and that of foreclosed assets to 50% (+2.4 points).
Refering to liquidity, the ‘fully loaded’ CET 1 capital ratio rose to 14.4%, which represents an increase of 1.5 points in the year.