The consolidated result for the first quarter of fiscal year 2010 of Spanish banking groups amounted to €4,273 million, which represents €191 million less (4.3%) than in the first three months of the previous fiscal year. Of this result, the profit attributable to the parent company stood at €3,888 million, 4.1% lower than that obtained at the same date in 2009. These profits have been compatible with the balance sheet strengthening achieved through a considerable effort in provisions (provisions and allowances for insolvencies) and through an improvement in the level and quality of equity.
Thus, as of March 31, 2010, Spanish banks present a solvency ratio under Basel II criteria (BIS ratio) of 13.2%, with excess equity of €53,886 million (22.2%) over their minimum regulatory requirements, and an increase in eligible equity of 8.8% compared to March of the previous fiscal year. The highest quality indicator, known as core capital, stands at 8.5%, 148 basis points above that achieved one year earlier.
Following the significant effort in provisions and the substantial containment of structural costs, the profitability obtained in terms of ROA (on average total assets) is 0.80% for the fiscal year as a whole, only 6 basis points lower than that of the same period last year. Meanwhile, the profitability achieved on average equity (attributable ROE) was 12.02%, although in this case the decrease observed compared to the previous year is also due to the strong increase experienced in equity (the denominator of the ratio).
Regarding the evolution of the margins in the consolidated income statement, the strong performance of recurring results stands out, as demonstrated by the 6.7% increase in the operating margin (before provisions) in absolute values. This increase is supported by the sound management of the interest margin, which now represents 2.32% on average total assets (ATA) compared to 2.26% in March 2009, and by the improvement in the cost structure, which places the efficiency ratio at 41.9% compared to 42.9% one year earlier.
Despite the significant effort made in provisions amounting to €4,860 million in the first quarter of the year (0.91% on ATA), 17.5% more than the previous year, the consolidated operating income registered a minimal decline of 0.8%.
Meanwhile, the consolidated balance sheet closed the first quarter of 2010 with a 3.4% annual increase, reaching €2.17 trillion.
Despite the difficult economic and financial environment in which we still find ourselves, Spanish banking groups have increased customer lending by 0.1%. The non-performing loan ratio reaches 4.18%, and the coverage ratio stands at 66%. During this period, customer deposits increased by €81 billion, representing an 8.7% annual increase and a significant improvement in the deposits-to-loans ratio to 75% (69% one year earlier).
Finally, and as mentioned at the beginning of this note, the increase in accounting equity by €20,605 million compared to that existing at the close of the first quarter of the previous fiscal year stands out, representing a 17.6% annual increase, well above the growth of total assets.
