Bankinter is one of the representatives of the medium bank which has a better recommendation from different financial analysts. To the point that it may have a potential for revaluation even higher than that generated by the large Spanish banks. As one of the options to join the portfolio of small and medium investors from now on. Beyond other technical considerations and maybe also from the point of view of its fundamentals.
At the moment the shares of this financial group are at levels comprised between 7 and 8 euros. If this last resistance is exceeded, it cannot be ruled out that it can even go up to 10 euros, although in this case directed to the medium and long term. Because of course it cannot be forgotten that it is immersed in the bad moment that banks are going through in the equity markets. And in this sense, Bankinter can certainly not be an exception. We will have to hope that in the end this sector has a better performance to open positions in this value of the selective index of the Spanish stock market, the Ibex 35.
While on the contrary, it is also necessary to analyze that the price of its shares comes from much lower levels than in the valuation it has at the moment. Therefore, you have to be a little cautious before entering their positions because the risks in operations they are always present and even more so in these difficult months for the Spanish stock market and especially for the banking sector. One of the worst behavior they have been developing since 2017. These are variables that must be taken into account before making a decision, in one sense or another. It is what reason dictates above other considerations.
Bankinter results
Bankinter's net profit reached 526,4 millones de euros in 2018, 6,3% more in the same period of the previous year. The entity has obtained these record numbers thanks to its recurring business and "with its main strengths: profitability, solvency and quality of assets, in positions of leadership in the sector." Securities (CNMV).
In which Bankinter has reported that the entity's net profit at the end of last year stood at 526,4 million euros, and the Profit before tax in 721,1 million, which represents increases with respect to the previous year of 6,3% and 6,5%, respectively. In this sense, this financial group closed 2018 with growth in all margins. Net interest income ends 2018 at 1.094,3 million euros, which is 5,8% more than the same data from a year ago.
Balanced business lines
The Bankinter Group's results are based practically entirely on customer business, which makes them sustainable for the future. Bankinter has consolidated over the last few years an income diversification strategy in which mature businesses and countercyclical with new businesses that have been incorporated and that have a higher growth rate, which has allowed a balanced development of the whole.
The contribution in relative terms of all these lines to the bank's gross margin has been varying in recent years as a function of the increasing prominence of these new businesses, such as Bankinter Portugal or the consumer business. The line that makes the highest contribution to the gross margin continues to be Business Banking, with 30%.
Beyond our borders
Moreover, the loan portfolio This business has experienced a growth trend for years that has led to the year closing at 24.000 million euros, of which 22.600 million correspond to the loan portfolio of companies in Spain, which represents 3,2% more than the year above, when the sector as a whole has decreased by 5,1%, according to data as of November from the Bank of Spain.
Transactional and relationship activity has been gaining weight in the Corporate business, with clients entrusting the bank with an increasingly global part of their financial needs. This is demonstrated, for example, in the growth in fee income, which represent 18% more in the year. In the same way, this greater linkage of the companies with the bank has resulted in the good results obtained by specialized activities such as Investment Banking or the International Business, which already generates 27% of the gross margin of the entire Company business and where Bankinter is today a benchmark brand in the market.
Divisions in the banking profile
Commercial Banking, or of individuals, is the second line of business of the bank based on its contribution to the gross margin, with 28% of the total. Within this line of business, the Private Banking segment, which groups together clients with the greatest assets, has proved resilient in a particularly difficult environment. At the end of the year, the managed assets of these clients amounted to 35.600 million euros, which is 2% more than a year ago, despite the reduction of 2.500 million euros produced in the portfolios due to the market effect. In addition, the bank has captured 3.100 million euros of new equity from these clients, compared to 2.800 in 2017.
A fundamental part of this business line is the Personal Banking segment, which ended the year with an equity of 21.600 million euros, 2% more despite a market effect that has reduced the value of the portfolio by 1.000 million euros. The new net worth captured among these clients in 2018 was 1.400 million. The good performance of products clearly attracting new customers, such as the payroll account and mortgage loans in its different modalities.
Thus, the portfolio of payroll accounts at the end of the year stood at 8.317 million euros, which is 22% more than in 2017. Regarding the residential mortgage, the volume of new production in the year was 2.532 million euros. euros, 11% more than in 2017, being 30% of these mortgages at a fixed rate.
Linked insurance company
Direct Line is the third line of business in terms of contribution to the bank's gross margin, with 22%. The number of policies or risks insured by this subsidiary reached 3,01 million at the end of the year, which is 7,9% more than in 2017. Written premiums in 2018 amounted to 853,1 million euros, a 7% more than a year ago, with the growth in Motor premiums of 5,3% compared to the 2,4% average for the sector; and 12,4% more in Home premiums, compared to an average growth of the sector in this modality of 3,2%, with data as of November. The combined ratio of this business stands at 87,3% at the end of the year, and the ROE at 38%.
Regarding the Consumer business, operated through Bankinter Consumer Finance, the client portfolio now exceeds 1,3 million, 18% more than those existing a year ago. Consumer business activity has maintained a good rhythm throughout the year, with a balance of 632 million euros in new loans that represent 46% of the same figure as of December 2017.
Bankinter investment portfolio
Regarding the investment portfolio, it closed the year at 2.000 million euros, with a growth of 34% compared to the same figure a year ago. As for Bankinter Portugal, which is the business line most recently incorporated into the bank's activity, it closed a successful 2018 in all its headings, with double digit growth both in resources, 17% more than in 2017, and in loan investments, reaching a volume of 5.400 million euros, 12% more than a year ago, with the growth of the business loan portfolio being especially significant: a 42% more.
Similarly, all the margins of the Bankinter Portugal account show growth of one remarkable magnitude: 13% more in net interest income, 14% more in gross margin, and 73% above 2017 in operating margin. With all this, the profit before tax of this activity shoots up to 60 million euros, 92% more than that obtained in 2017. As data to reflect on whether this Spanish bank can be the subject of our operations on the stock market.
A fundamental part of this business line is the Personal Banking segment, which ended the year with an equity of 21.600 million euros, 2% more despite a market effect that has reduced the value of the portfolio by 1.000 million euros. The new net worth captured among these clients in 2018 was 1.400 million. The good performance of products clearly attracting new customers, such as the payroll account and mortgage loans in its different modalities.