Ibercaja aims to maintain 300 million euros of profit by 2026 without consummating its IPO

Over the weekend, Ibercaja unveiled its 2024-2026 strategic plan, centered around prioritizing customer satisfaction and resilience. The plan aims to achieve a profit of 300 million euros without resorting to going public, a path the bank has previously attempted but without success.

This strategic plan no longer includes the requirement to go public, as the Ibercaja Foundation has established a reserve fund worth 320 million euros, thus eliminating the legal obligation to go public according to the Savings Bank Law. The bank’s president, Francisco Serrano, emphasized this during the plan’s presentation in Zaragoza.

Dubbed the ‘Now Ibercaja’ plan, it outlines the objective of strengthening the bank’s solvency over the next three years, aiming for a fully loaded CET1 coefficient between 13.5% and 14%, up from the current 12.7%. Additionally, Ibercaja aims to maintain an LCR liquidity ratio above 190% and limit non-performing assets (NPAs) to below 3.5%. The plan also sets a target for a profitability (ROTE) above 10%, ensuring that the bank can cover its capital costs for a medium-low risk profile.

The bank’s CEO, Víctor Iglesias, explained that achieving a ROTE of 10% between 2024 and 2026 is more significant than the previous year’s 11.6% due to expected interest rate cuts, narrower margins, increased costs from salary increments, and higher risks of defaults.

Another key goal outlined in the plan is to increase the customer base by 10%, specifically targeting 50,000 new private clients, 6,000 business clients, and 2,000 clients from SMEs and large companies by 2026. To achieve these objectives, the plan allocates a budget of 45 million euros for this year, combined with regular budget resources, totaling an investment of 110 million euros in Ibercaja. Over half of this investment will be dedicated to technological, operational, and commercial transformation.

Moving forward, Ibercaja will continue its growth strategy, focusing on the geographic areas of Madrid and Arco Mediterráneo, while further strengthening its commercial presence in Aragón, La Rioja, Guadalajara, Burgos, and Badajoz. Additionally, the bank aims to renew and attract a younger customer base.

However, Ibercaja’s growth prospects are influenced by the political instability in Spain. Serrano highlighted that Spain has experienced a succession of 16 electoral processes since the restoration of democracy, with 8 of them occurring in the past eight years. This instability has resulted in parliamentary fragmentation and is not conducive to investment. Serrano emphasized the need for a stable political environment that promotes dialogue and negotiation, stating that stronger and more stable institutions would ensure more consistent and secure growth.