The attributable profit of Spanish banks amounted to €12.06 billion in 2017, an increase of €4.09 billion compared to the previous year. This difference reflects the losses recorded by one institution in 2016. Without considering the results of that institution, the attributable profit in 2017 would have been 5.3% higher than that obtained in the preceding year.
The growth in gross margin, the containment of operating expenses, and lower provisioning requirements for non-performing loans explain the increase in results, despite the specific write-downs undertaken in the final quarter of the year, in some cases of significant amounts.
Net interest income reached a record high and exceeded €59 billion for the first time in 2017, representing an annual increase of 4.5%, largely due to the reduction in financial costs resulting from changes in the funding structure that, in recent years, have limited the growth of higher-cost liabilities.
After several years of stagnation or limited growth, net fee and commission income registered an increase of 7.2% compared to the previous year.
Core income, which comprises net income obtained from interest, fees and commissions, dividends, and results from equity-accounted investments, exceeded €80 billion, representing an increase of 5.3%.
Gross margin, which stood at a figure close to €85 billion, grew by 3.8% due to the increase in the most recurring items of the income statement (interest, fees and commissions, and equity-accounted investments), which offset the lower results obtained overall from dividends, financial transactions, and foreign exchange differences.
Operating expenses have remained at a similar level to the preceding year, with an annual growth of 0.4%, which has improved the efficiency ratio by two percentage points, placing it at 49%.
Total provisions and impairment charges for financial assets were 10% lower than in the previous year, although the effort continues at close to €20 billion for the year.
The combined effect of write-downs of other assets and results on sales, on the one hand, and tax expenses, on the other hand, have placed the consolidated profit for the year at €15.264 billion. With a decrease in average total assets of 1.8% annually, these figures represent a return on assets (ROA) of 0.60%, an increase of 19 basis points compared to 2016.
Average equity stood at €196 billion as of December 31, 2017, 0.6% higher than a year earlier, despite the reduction in the scope of the AEB bank aggregate following the resolution of one institution. In relation to the attributable profit of €12.06 billion, the return on equity (ROE) stood at 6.16%, more than two percentage points above the 4.09% of 2016.
Press release on the results of Spanish banks as of December 2017
