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00:00GIVE US THE TOP LINE AND THE MAIN MESSAGE YOU ARE TRYING TO COMMUNICATE WITH THESE ACTIONS TODAY. GUEST: THANK YOU AND GOOD MORNING. THE MAIN MESSAGE IS THAT WE HAD A REALLY GOOD THREE YEARS IN TERMS OF OUR ABILITY TO GROW. WE ARE EXPECTING REVENUES TO GROW OVER 7%, AND WE HAVE SOME INTEGRATION SO WE EXPECT OUR PROFIT TO GROW 15%. IT WILL RETURN EQUITY OF ABOVE 12%. IT HAS ALSO LIMITED OUR COST OF CAPITAL. ANNA: LET ME GO THROUGH SOME OF THE TARGETS YOU HAVE. YOU HIGHLIGHT THE OPPORTUNITY FOR GROWTH IN SAVINGS. I WONDER WITH INFLATION RUNNING AS HIGH AS IT IS, I WONDER HOW YOU THINK THAT CAN BE DONE. IS THAT STILL SOME OPPORTUNITY FOR PEOPLE TO SAVE MORE? GONZALO: MORE THAN EVER. IF YOU LOOK AT INFLATION YOU ALSO HAVE NOMINAL RATES AND REALIZE THAT DESPITE RATES GOING UP, REAL RATES ARE GOING TO BE NEGATIVE INVEST IN DEPOSITS INTO DISCRETIONARY MANAGEMENT LIKE SAVING PRODUCTS FOR THE INDUSTRY. SPAIN IS WELL BELOW THE LEVEL OF THE EU, SO THERE IS TREMENDOUS OPPORTUNITY AS A MARKET LEADER. WE HAVE 30% OF MARKET SHARE FOR THESE LONG-TERM SAVINGS SO BRIGHT OPPORTUNITY FOR US AHEAD. ANNA: LET ME ASK YOU ABOUT HIGH NET WORTH INDIVIDUALS. YOU TALKED ABOUT THE SCOPE OF GROWTH FOR THAT CLIENT BASE IN PARTICULAR. CAN YOU GIVE US MORE DETAIL ABOUT WHAT NUMBERS YOU ARE TARGETING AND WHAT YOU CAN OFFER THAT OTHERS DON ' T AND THAT AREA? GONZALO: IT IS IMPORTANT TO ADDRESS OUR MARKET THROUGH WEALTH SOLUTIONS. WE HAVE OVER 6000 CLIENTS, WE HAVE A PRIVATE BANK, AND THE MOST IMPORTANT THING IS WE ARE PRICED ON THE BASIS OF FULLY INDEPENDENT ADVISORIES, WHICH IS THE WAY TO ADDRESS THIS PART OF THE MARKET. WHERE THE FIRST OF THE BANKING SECTOR TO MAINTAIN THAT AND IT IS PARTICULARLY WORKING FOR CLIENTS. ANNA: STICKING WITH YOUR STRATEGY AND AMBITIONS YOU ALSO TALK ABOUT THE SCOPE FROM INVESTMENT BANKING OUTSIDE OF EUROPE CARE -- EUROPE. CAN YOU EXPAND ON WHAT HE PLANNED TO DO THEIR? GONZALO: WE HAVE THE U.K., GERMANY, PORTIONS OF THE WORLD TRADING IN VIENNA. OUR WHOLE MARKET FOR THE PURPOSE OF THINKING -- BANKING AS THE EURO ZONE AND WE STILL HAVE TO TAKE ADVANTAGE OF THE RELATIONSHIP WE HAVE WITH ALL OF THESE CORPORATE OPERATING PLACES TO MAKE SURE WE CAPTURE THE NEEDS OF THE BANK, COMPLEMENTARY LEVEL. WE PLAN TO KEEP GROWING WITH THESE INVESTMENT RATE CLIENTS OVER THE NEXT THREE YEARS. ANNA: YOU ALSO PLAN TO KEEP GOING WITH YOUR INDUSTRIAL INVESTMENTS? ONE KEY INVESTMENT YOU HAVE IS A 5% STAKE IN TELECOM. IS THAT ONE SPECIFIC PERIOD IN MIND? GONZALO: WE HAVE BEEN REDUCING OUR INVESTMENTS IN MINORITY STAKES OVER THE LAST 20 YEARS AND NOW WE HAVE REACHED A LEVEL WHERE THESE ACCOUNT FOR A SMALL PART OF THE CAP. THERE ARE 2%, AND AS YOU ARE FULLY AWARE, WE HAVE HAD A STEAK THAT HAS BEEN HEDGED. THERE IS NO INTENTION TO DIVEST FROM THEM. ANNA: YOU HAVE AN EXTENSIVE BRANCH NETWORK, IN PARTICULAR AFTER THE MERGE WITH BANKIA. I WONDER WHAT THE SIZE OF THE EXPANDING NETWORK IS OPTIMAL. DO YOU PLAN TO CLOSE BRANCHES? GONZALO: IN THE LAST 12, WE HAVE ACTUALLY BROUGHT DOWN OUR BRANCHES THAT PROVIDE 1500 BRANCHES. WE HAVE NOW THE ONES THAT WE NEED. WHERE THE LARGEST BANK IN SPAIN. WE HAVE MANY PRESENCE IN SPAIN. WE HAVE DIFFERENT TYPE OF COMPETITORS AND WHERE LOOKING UP THE COST INCOME RATIO BELOW 50%, BELOW 48% BY THE END OF 2024. ANNA: YOU DOING A LOT OF THAT WORK ALREADY. CAN I ASK YOU ABOUT THE ECONOMIC ENVIRONMENT WE FIND OURSELVES IN AND HOW THAT PLAYS OUT FOR CAIXABANK, ESPECIALLY THINKING ABOUT THE EXPECTATION OF INTEREST RATE HIKES FROM THE ECB? WHERE ' S THE INTEREST OF THE BANK TO HIGHER INTEREST RATES? GONZALO: WE HAVE 400 BILLION DEPOSIT BASE AND THE DEPOSIT BASE HAS PROFITABILITY RELATED TO THE NOMINAL RATE. WHEN WE SEE HOW THE ECB PLANS TO MOVE AROUND THE MARKET, I WOULD SAY FROM THE CURRENT MIND OF 50 BASIS POINTS TO PLUS 50 BASIS POINTS, WE ARE SEEING CLOSE TO 25% OF OUR NET INTEREST INCOME, WHICH IS APPROXIMATELY 1.2 BILLION EUROS OF SENSIBILITY. -- SENSITIVITY. IT IS POSITIVE BUT IT IS SOMEWHAT MODERATED BY THE FACT THAT WE WILL START TO LOOK AT OUR DEPOSITS. THE INTEREST IS NOT AS SEVERE. ANNA: A BIG INFLUENCE THERE. WHAT ABOUT THE MARKET VOLATILITY WE HAVE SEEN IN RECENT MONTHS? HOW IS THAT AFFECTING YOUR ASSET MANAGEMENT IS BUSINESS -- BUSINESS? GONZALO: IT IS THE FIRST TIME WE HAVE SEEN MARKET VOLATILITY. OUR MARKET HAS BEEN ABLE TO SUSTAIN THE FLOWS IN THE FIRST QUARTER DESPITE THE VOLATILITY. FOR US, THAT MEANS GREAT DEALS AND DOES PROVING RESILIENCE OF THE BUSINESS. THE MARKET CAP ALSO HAS SUFFERED BUT THAT WOULD MEAN MODERATELY. KNOWING WHAT THEIR OBJECTIVES ARE AND HOW THE INVESTMENTS ARE MADE, AND THEY DO NOT SEE VALUES COMING DOWN, BUT THEY HAVE A STUNNING INVESTMENT PHILOSOPHY BEHIND IT.

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Caixabank CEO on Share Buyback, Investment Targets

CaixaBank SA, which runs Spain’s biggest retail banking network, is targeting higher revenue and profitability, propelled by the outlook for higher interest rates. Caixabank Chief Executive Officer Gonzalo Gortazar discussed new targets, including higher profitability. He speaks with Bloomberg's Anna Edwards on "Bloomberg Markets: Europe." (Source: Bloomberg)

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