THE MOST RECURRENT MARGINS REMAIN AT LEVELS SIMILAR TO THOSE OF THE FIRST QUARTER 2014
NET EQUITY INCREASES BY 29,857 MILLION EUROS, OF WHICH 19,511 MILLION (65%) CORRESPONDS TO OWN FUNDS
THE SOLVENCY RATIO STANDS AT 13.96%, UNDER BASEL III CRITERIA
COMMON EQUITY TIER 1 (CET 1) REACHES 12.16%, 119 BASIS POINTS MORE THAN IN MARCH 2014
BUSINESS MARGINS: The most recurrent margins of the income statement—those that best express typical banking activity—registered increases of around 10%, in line with the growth experienced by the average balance sheet as a whole (11.2%), maintaining profitability levels (measured on average total assets) similar to those of 2014.
GROSS MARGIN: The gross margin amounted to 20,736 million euros, representing 3.36% of average total assets, a level similar to that of the same period in 2014. Examining the components of this margin, we can see that the net interest margin increased by 11.2%, thus maintaining profitability at 2.16%. An increase in commission income of 291 million and in other net operating income of 339 million contributed to the gross margin registering a rise of 10.3%.
EXTRAORDINARY RESULTS AND PROVISIONS: Extraordinary results show a decrease of 20 basis points (bp). In parallel, provisions and impairment losses on assets experienced a decline of 32 bp. These decreases are explained, in part, by the sharp increases registered in these items in the first quarter of 2014, which were of a one-off nature and, as expected, have not been repeated. Specifically, provisions for non-performing loans decreased by 8% year-on-year, reaching 4,727 million euros in March 2015, equivalent to 0.77% of average total assets, 16 bp less than the previous year.
ATTRIBUTABLE PROFIT: The aforementioned non-recurrent evolution of extraordinary results, provisions, and impairment losses on assets explains why attributable profit grew by 62.8% in this first quarter, reaching 3,651 million euros, representing a return on average total assets of 0.59%, with an increase of 19 bp. ROE stood at 8% in this first quarter of 2015.
BALANCE SHEET GROWTH: The balance sheet of Spanish banking groups has increased by 12.9% compared to March 31, 2014, reaching 2.5 trillion euros. Fixed-income securities portfolios increased by 71,671 million to 412,249 million in the same month of 2015. On the funding side, the net borrowing position with monetary financial institutions stands at 111,601 million, with an increase in deposits taken from central banks of 27,216 million over the last twelve months.
LOANS AND DEPOSITS: Customer loans registered an increase of 115,418 million, 8.6% more compared to the balance at March 31, 2014. Customer deposits increased by 8% year-on-year, placing the loan-to-deposit ratio at levels similar to previous ones, around 113%.
NON-PERFORMING LOANS: The non-performing loan ratio has evolved positively over the last twelve months, decreasing to 6.9% compared to 8.05% in March 2014 (once the effect of foreclosed assets is discounted). Likewise, the coverage ratio for non-performing loans has improved to 60%, two percentage points higher than that registered a year earlier (58%).
NET EQUITY: The very positive evolution of net equity stands out, with an increase of 29,857 million euros. Significant increases are registered in all items, both from an increase in own funds of 19,511 million and from the increase in unrealized gains on financial assets available for sale, by 4,451 million, and in foreign exchange reserves, by 9,426 million. Overall, the net equity of Spanish banking groups amounts to 194,839 million and represents 7.7% of total assets. The solvency ratio of Spanish banking groups stands at 13.96% under Basel III criteria and reaches Common Equity Tier 1 (CET1) of 12.16%, or 119 bp more than at March 31, 2014.
INDIVIDUAL FINANCIAL STATEMENTS
BUSINESS MARGINS: The lower results obtained from financial operations, whose profitability decreased by 13 basis points on average total assets, are offset by the increase (11%) in the net interest margin and by the advance in profitability of other net operating income.
PROFIT FOR THE YEAR: After taxes, profit for the year stands at 2,253 million euros (or 17.8% higher than a year earlier), with a return on average total assets of 0.61% (or six bp above that achieved in March 2014). The effort in provisions for non-performing loans continues at high levels, representing 0.51% of average total assets.
BALANCE SHEET: The aggregate balance sheet increased by 107,997 million euros (7.73%). Customer loans experienced a slight contraction of 0.6%, with a non-performing loan ratio of 12.8% compared to 14% a year earlier, and a coverage level for non-performing loans of 59%, slightly higher than at March 31, 2014. Customer deposits show a slight increase of 1.5% year-on-year, placing the loan-to-deposit ratio at 106%, compared to 108% in March 2014.
NET EQUITY: The positive trend in the evolution of net equity continues, increasing by 13.6% to 145,399 million euros. This improvement is observed both in unrealized gains on available-for-sale portfolios (3,146 million) and in capital and reserves (14,544 million). Net equity represents 9.7% of total assets, or 0.5 percentage points more than in 2014.
