CONSOLIDATED INCOME STATEMENT
Spanish banks recorded attributable profit of €7.19 billion in the first half of 2021, compared with losses of €11.531 billion in the same period of the previous year due to the provisions and write-downs made in 2020 to anticipate the potential effects of the crisis arising from the pandemic.
Gross income, which represents total income earned, fell by 3.1% year-on-year, mainly due to the decline in net interest income, despite the slight improvement in net fee and commission income and in net trading income excluding foreign exchange differences.
Lower operating expenses, which contracted by 6% in this period, fully offset the reduction in gross income, bringing the efficiency ratio to 47.4%, an improvement of more than one percentage point compared with June 2020.
The level of charges and provisions made, €9.062 billion in the half-year, returned to pre-crisis levels, down 36%, meaning €5.098 billion less than the extraordinary provisions made during the same period of the previous financial year.
Lower tax expenses and, in particular, the absence of the large write-downs recorded in 2020 brought consolidated profit for the period to €8.44 billion and return on equity (ROE) to slightly above 7%, the highest ratio in the last ten quarters.
CONSOLIDATED BALANCE SHEET
The consolidated balance sheet rose to €2.7 trillion as of 30 June and is 2.6% lower than a year earlier, partly due to the scope effect following the sale of a subsidiary of a banking group, and to the decline in derivatives trading activity.
Credit granted to customers, whose aggregate volume was affected by this scope effect, fell by 2.7% and shows a non-performing loan ratio of 3.7%, three basis points lower than a year earlier, and a coverage level of 71.9% of impaired assets, compared with 72.9% in June 2020.
Customer deposits recorded a slight annual increase of 0.3%, despite the reduction in the consolidation scope, bringing the loans-to-deposits ratio to 102%, four percentage points lower than a year earlier.
In aggregate terms, the sum of balances with central banks and credit institutions continues to show a net lending position of more than €64 billion. As for the remaining balance sheet items, alongside the decline in derivatives trading activity of more than €50 billion, both holdings of fixed-income securities in institutions’ portfolios fell by 3.4% year-on-year, and the outstanding amount of instruments of this nature issued by banks decreased by 7.3%.
Equity increased by 4.5% over the year and represents 7.7% of total assets, 50 basis points more than in June 2020.
The highest-quality capital ratio (CET1) stood at 12.5%, 83 basis points above the level recorded a year ago.
