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CaixaBank starts the year with an inflated profit due to the merger with Bankia

The Spanish bank CaixaBank published this Thursday a net profit of 4,786 million euros (5,750 million USD), a result that was inflated by the merger with Bankia, closed at the end of March.

Excluding the merger, CaixaBank’s result was more modest: 514 million euros in profit, about 618 million dollars.

The merger between the two Spanish entities, effective from March 26, gave rise to the bank with the largest volume of assets in Spain: more than 663,000 million euros of assets currently (about 800,000 million USD), and 21.1 million of clients in Spain and Portugal.

The merger, which basically consisted of a takeover of Bankia by CaixaBank, added 4,300 million euros at the accounting level, the entity explained in a statement.

Merger aside, CaixaBank had a net profit of 514 million euros, compared to the 90 million obtained in the first quarter of 2020, when it was severely limited by the provisions aimed at cushioning the impact of the COVID crisis.

Net interest income for CaixaBank alone, equivalent to business volume, fell 0.7% year-on-year to 1,191 million euros.

The bank announced at the end of March that it wants to cut 8,291 jobs as part of the merger-related restructuring, or almost one job in five.

The job reduction plan is due to the duplications generated by the merger and current market conditions -digitization, which translates into less use of offices, low interest rates, and the crisis derived from the pandemic- CaixaBank explained at the time.

emi / avl / zm

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