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CaixaBank sets higher solvency, profitability targets under new strategic plan

Spanish lender CaixaBank SA unveiled its strategic plan for the period from 2019 to 2021, including higher solvency and profitability targets, and announced some management changes.

The bank said Nov. 27 that it aims to achieve a common equity Tier 1 ratio of 12% by 2021-end, plus a further 100 basis points as a temporary buffer to absorb potential regulatory impact, and a return on tangible equity of more than 12%. A flat interest rate curve could peg the latter at 10% by 2021-end, the lender said. As of September-end, the bank's fully loaded CET1 ratio was 11.4% and its return on equity was 7.7% for the first nine months of 2018.

CaixaBank also intends to achieve a compound annual growth rate of around 5% in revenue during the period, against a roughly 3% increase in recurring expenses.

Reduction of nonstrategic assets and group nonperforming loan ratio to below 3% is also an aim outlined in the strategic plan.

The lender also plans to cut its branches in Spain, its main market, by 821 to 3,640 by 2021 as part of its new strategic plan.

In its commercial network, the lender plans to have 600 store branches by 2021-end, compared to the projected 285 branches as of 2018-end, and have more than 1,000 AgroBank branches in towns with less than 10,000 inhabitants. The bank also plans to expand its inTouch customer relationship model to reach 2.6 million customers by the end of the plan period, compared to an expected reach of 600,000 as at 2018-end.

"The current environment and new technologies offer a wealth of opportunities to continue generating value and the new plan intends to capture these, including the use of blockchain, artificial intelligence and robotics, among others," CaixaBank said.

The Spanish bank also aims to focus on consolidating the business model of Portuguese unit Banco BPI SA and on improving its profitability.

Additionally, the Spanish lender announced management changes affecting its insurance, international banking and internal audit divisions. Tomás Muniesa will step down as CEO of VidaCaixa SAU de Seguros y Reaseguros, general manager for insurance and asset management and as a member of CaixaBank's management committee to focus on the role of nonexecutive deputy chairman of Caixabank, VidaCaixa and SegurCaixa Adeslas SA de Seguros y Reaseguros.

In addition to his post as a managing director at VidaCaixa, Javier Valle will join CaixaBank's management committee and head of the executive insurance department.

The bank also expanded the duties of Iñaki Badiola, executive director of corporate and international banking, to also head of international banking. Badiola succeeds María Victoria Matía, who is due to step down from the bank's management committee and as executive director of international banking.

Deputy general manager of internal audit, Joaquín Vilar, will also step down from the management committee to make way for Marisa Retamosa, currently corporate director of resources security and management, who will also assume the role of executive director of internal audit, CaixaBank said.

Current Madrid area director, Juan Gandarias, will manage CaixaBank's new executive personal finance department together with the bank's CaixaBank Consumer Finance and CaixaBank Payments Establecimiento Financiero de Credito de Entidades de Pago S. units.