Cecabank improves its result in 2020 and consolidates its position as the market leader in depositary and custody services

8 April 2021
  • The institution improves its after-tax results (+20.3%) and its gross margin (+17%), despite the pandemic
  • The positive evolution of the equity managed by the institutions deposited with Cecabank and the volume of transactions processed by the bank have allowed this improvement in performance

Madrid - 8 April 2021

Cecabank, a Spanish bank that offers specialised Securities Services, Treasury Management, Digital Payments and Solutions, improved its results in 2020 compared to the previous year. It reinforced its position of leadership within the depositary and custody markets, and recorded significant progress in the fulfilment of its Strategic Plan despite the impact of COVID-19 on its activity.

The institution's General Meeting of Shareholders has approved the 2020 financial statements. Cecabank's after-tax profit was €54.4 million. This good performance is based on gross margin growth of 17%, to €246 million. Specifically, fee and commission income grew by 18.8% and the financial margin by 12.3%. To this increase in gross margin it is necessary to add the bank's efforts to reduce costs in its ordinary activity, which have fallen by €2.6 million.

Consolidation of the leadership in Securities Services:

Securities Services includes all post trading services for marketable securities and financial instruments such as depositary, registry, custody, clearing and settlement services.

In 2020, Cecabank was once again the leading provider of Securities Services in Spain: a position based on its independence, as it does not market products in the retail market, and on its neutrality, due to its specialisation in custody and depositary services.

Last year, the bank reported €187.4 billion in assets under custody, 14% more than in 2019, and became the leading depositary of the Iberian Peninsula when it added the investment funds service of the Portuguese institution BPI Gestión. At the end of the year, the equity deposited exceeded €152.8 billion (+28%), managed by 36 management firms: seven more than in 2019. These figures do not yet include the integration of the equity of Bankia's management firms, an agreement that was reached in May 2020, the transfer of which took place in February 2021.

For José María Méndez, CEO of Cecabank: 'these figures position us, once again, as the leading independent national depositary for collective investment institutions and pension funds, thanks to the incorporation of the depositary services of institutions such as Bankia or Kutxabank, and the renewal and extension of the value-added services that we already provide to 36 management firms'.

The excellence and quality of service of Cecabank's custody activity, has once again also been acknowledged by the Global Banking & Finance Review magazine, which has honoured it for the fourth consecutive year with the award for 'Best Custodian Bank 2020 Spain'.

Good management by the institutions with deposits in Cecabank

These positive results do not detract from the fact that 2020 was also a complex and challenging financial period for Cecabank. In the Securities Services segment, equity under deposit fell 5% during the lockdown, although it rebounded in subsequent months and, by the end of July, these deposits were back to the figures recorded prior to the state of alarm. This is due to the good performance by the management firms with deposits in Cecabank.

The second wave of contagion also had an impact on financial markets and slowed the equity growth of previous months. However, at the end of the year, and thanks to the progress in the development of the vaccines, the certainty surrounding Brexit and monetary incentives by the European Central Bank and the US Fed, the equity depositary portfolios increased in value.

Changes in card use

Coronavirus has also had an impact on Cecabank's other businesses. Cecabank processes the transactions for cards issued by financial institutions. The volume of card transactions processed decreased by 38% during the lockdown and totalled 37 million transactions in April, but by the end of the year, and despite the fact that the figure had fallen again due to restrictive measures from October onwards, it stood at 77 million. 2020 closed up with 1,000 million processed operations in total: 2020 ended with 1 billon transactions processed in total: an additional 16.6% when compared with the previous year.