CONSOLIDATED INCOME STATEMENT
Spanish banks made a provision and write-down effort of €26.518 billion in the first half of 2020 to anticipate the economic effects of the coronavirus pandemic, resulting in a negative attributable profit of €11.531 billion.
Gross income, which represents total revenue, decreased 5.9% in this period due primarily to a reduction in net interest income and, to a lesser extent, net fee and commission income, despite higher results from financial operations.
Operating expenses decreased 7.3% through June year-on-year, bringing the efficiency ratio to 48.8%, an improvement of 70 basis points compared to the first half of the previous year.
The combined effect of reduced gross income and lower operating expenses places net income, a measure that does not include provisions, above €20 billion in the first six months of the year, 4.5% lower than in June 2019.
The high volume of provisions and write-downs of intangible assets made to strengthen the position against COVID-19, totaling €17 billion more than in the previous year, account for the negative result for the half-year.
CONSOLIDATED BALANCE SHEET
The consolidated balance sheet exceeded €2.75 trillion for the first time as of June 30, 2020, representing year-on-year growth of 5.3% and reflecting the increase in loan and deposit balances to record levels.
Customer lending increased 2.5% to reach €1.6 trillion, while customer deposits increased 4.8% and exceeded €1.5 trillion. Thus, the loan-to-deposit ratio decreased 2 percentage points to 106%.
The non-performing loan ratio decreased to 3.6%, compared to 3.9% a year earlier. Following the significant effort in provisions for impairment, the coverage ratio rose to 74% of doubtful assets, representing 6 percentage points more than in June 2019.
The aggregate net balance with central banks and financial intermediaries changed sign, so that Spanish banks as a whole show a net lending position of nearly €18 billion in June 2020, compared to nearly €4 billion net borrowed a year earlier.
Equity has been affected by the negative results recorded in the first half of the year and stands at €170 billion as of June 30, representing an annual decrease of 12%.
The highest quality capital ratio CET1 (fully loaded) has increased to 11.7% from 11.4% a year earlier, due to the lack of dividend distribution and the decrease in risk-weighted assets.
