CONSOLIDATED INCOME STATEMENT
Spanish banks obtained an attributed profit of 11,904 million euros in 2019, representing an 18.3% decrease compared to the previous year, primarily due to higher provisions and intangible asset write-downs amounting to 4,000 million euros.
Net interest income, which reflects typical banking activity, maintained its growth path during this period, with a year-on-year increase of 2.6% that allowed it to exceed the 60,000 million euro threshold at the end of the fiscal year.
The 2.5% increase in net fee and commission income and better results from exchange rate differences offset the lower results from financial operations, bringing the gross margin to 84,300 million, an increase of 1.8% compared to the previous year.
The operating result was affected by higher provisions made due to restructuring costs, despite the strong performance of both operating expenses, which barely increased by 1.2% annually, and provisions to cover the impairment of financial assets.
The evolution of operating expenses allowed the efficiency ratio to stand at 49.3%, representing an improvement of 30 basis points compared to 2018 and consolidating it among the best in the European Union banking systems, where the average is 65.8%.
Lower results from the sale of non-current assets and, in particular, the heavy write-down of intangible assets, resulted in a decrease of nearly 3,500 million compared to 2018, which was only partially offset by 1,400 million in profits from the sale of non-financial assets and subsidiaries.
The attributed result of 11,904 million euros obtained for the 2019 fiscal year puts the return on equity (ROE) of Spanish banks at 5.8%, compared to the 7.2% ratio for the previous year.
CONSOLIDATED BALANCE SHEET
The consolidated balance sheet stood at 2.63 trillion euros as of December 31, 2019, representing an increase of 3.7% during the fiscal year, amounting to 94,000 million euros.
Loans granted to customers increased by 75,000 million, up 4.9% annually, to nearly 1.6 trillion euros. The non-performing loan ratio stood at 3.7% of doubtful assets, compared to 4.1% a year earlier, with 68% coverage, which is one percentage point higher than in December 2018.
Customer deposits, also with a growth rate above 4% per year, increased by 61,000 million euros during the fiscal year, and the loan-to-deposit ratio of 109% remained at levels similar to those of a year ago.
Financing taken from central banks and credit institutions, net of funds lent, amounted to 6,000 million euros at the end of 2019, a figure representing barely 0.2% of the balance sheet, almost half of that at the close of the previous year.
Among the other balance sheet items, the 6.3% increase in debt securities issued stood out, with a balance of 367,000 million as of December 2019, such that financing through instruments of this nature reached 13.9% of total assets.
Equity evolved in 2019 at the same annual rate of 3.7% as the overall balance sheet and, as in the previous year, represented 7.4% of the total. The solvency ratio, expressed in terms of fully loaded CET1, stood at 11.7% in December, compared to 11.3% a year earlier.
