MARGINS REMAIN AT LEVELS SIMILAR TO THOSE OF THE PREVIOUS YEAR.
EFFICIENCY CONTINUES TO IMPROVE THANKS TO THE MODERATE EVOLUTION OF OPERATING EXPENSES.
LOSSES FROM IMPAIRMENT OF FINANCIAL ASSETS DECREASE AS A CONSEQUENCE OF THE REDUCTION IN NON-PERFORMING LOANS.
THE SOLVENCY RATIO, “COMMON EQUITY TIER 1” (CET 1), STANDS AT 12.16%, 63 BASIS POINTS HIGHER THAN IN 2014.
THE NON-PERFORMING LOAN RATIO REACHES 6.4% COMPARED TO 7.6% IN SEPTEMBER 2014, WITH A COVERAGE LEVEL OF 63%, FIVE PERCENTAGE POINTS HIGHER THAN A YEAR EARLIER.
Spanish banking groups have obtained an attributed profit of €9,233 million during the first nine months of fiscal year 2015, with a slight decrease of 3.2% compared to those achieved in the same period of 2014. In these first three quarters of the year, the income statement has been characterized by the following factors: a) margins remain at levels similar to those of the previous year; b) efficiency has improved thanks to the moderate evolution of operating expenses; c) impairment losses on financial assets have decreased as a result of the reduction in non-performing loans and d) extraordinary results, considered non-recurring, have declined.
MARGINS: The most recurring margins, which reflect the typical activity of banking institutions, remain at levels similar to those of the previous fiscal year. Net interest income increases by 12.6% annually, above the 10% growth in average total assets, reaching 2.23% in annualized return on average total assets, with an improvement of five basis points compared to September 2014. This improvement has occurred in a balanced manner in both liability and asset products and stems from both increased volume and better price management.
RESULTS FROM FINANCIAL OPERATIONS (ROF). The ROF for the period and, in particular, those attributable to trading activity, are 25 basis points on average total assets lower than a year earlier, although they have been offset by higher profits obtained from: a) foreign exchange differences and b) “other operating income,” whose net increase improves profitability by 17 and 8 basis points on average total assets, respectively. However, the latter do not reflect the accrual of contributions made during the fiscal year to the Deposit Guarantee Fund as a consequence of a change in accounting standards.
GROSS MARGIN. Taken together, these variations explain why the gross margin increased by 10% annually to reach a volume of 62,454 million euros, equivalent to a return of 3.3% on ATA, in annualized terms, similar to that of the previous year.
OPERATING EXPENSES. Operating expenses grow at a rate of 7.9% annually, that is, three basis points on average total assets less than a year earlier, and place the efficiency ratio slightly below 48%, one percentage point higher than in September 2014, a percentage that compares very favorably with those of other countries in our economic environment.
PROVISIONS. Losses from impairment of financial assets continue the trend of progressive reduction observed in recent quarters, so that through September they decreased by 16 basis points to reach 0.71% of average total assets. The result from operating activities was 18 basis points on average total assets higher than a year earlier.
ATTRIBUTED PROFIT. Several non-recurring factors, of different signs, related to the accounting treatment of business combinations, activity with associates, and the sale of non-current assets, among others, result in the attributed profit as of September 30, 2015 amounting to €9,233 million, 3.2% lower than a year earlier, while its return on average total assets decreases from 0.55% to 0.49% in annualized terms.
RETURN ON EQUITY. ROE stands at 6.56%, compared to 7.47% in the same period of the previous year, affected by lower results in the numerator and by the increase in the denominator, that is, equity, which has increased on average by 10.2% annually.
BALANCE SHEET EVOLUTION. The consolidated balance sheet of Spanish banking groups amounts to €2.6 trillion as of September 30, 2015, 7.6% higher than twelve months earlier. This increase has been contributed to by both organic growth and several corporate transactions of different signs and variations in the exchange rate against the euro of the currencies in which some Spanish banking groups operate.
CREDIT AND NON-PERFORMING LOANS. Customer loans increase by €116,000 million, 8.3% annually, with a non-performing loan ratio of 6.4% compared to 7.6% in September 2014, and coverage levels of non-performing balances of 63%, five percentage points higher than a year earlier.
DEPOSITS. Despite the unusual environment of very low interest rates, customer deposits increase by 6.3% annually, approximately €80,000 million, bringing the loan-to-deposit ratio to 112.4%, two percentage points higher than that observed at the end of the third quarter of 2014.
ACCOUNTING EQUITY AND SOLVENCY RATIOS. Net accounting equity is 7% higher than in September 2014, despite negative variations in valuation adjustments due to foreign exchange difference reserves and lower unrealized gains on financial assets available for sale. Accounting equity, for its part, grew at a rate of 9.2% annually. The solvency ratio, expressed in terms of Common Equity Tier 1 (CET 1), stands at 12.16%, 63 basis points above that of a year earlier.
INDIVIDUAL FINANCIAL STATEMENTS
PROFIT FOR THE YEAR. The aggregate of the individual income statements of Spanish banks showed, as of September 30, 2015, an accounting profit of €5,179 million, representing an increase of €1,111 million, 27.3% more compared to those obtained in September 2014.
GROSS MARGIN. The gross margin decreases slightly, 4.1% annually, due to lower results from ROF. These results absorb the improvement experienced in net interest income, which advances 7.8% annually in amount and 4 basis points in return on average total assets.
OPERATING EXPENSES AND PROFITABILITY. The containment of operating expenses and lower losses from impairment of financial assets recorded in the period offset the also lower extraordinary results obtained through September. ROA thus stands at 0.47% compared to 0.36% a year earlier, and ROE at 4.9%, 60 basis points higher than in September 2014.
CREDIT AND DEPOSITS. The individual balance sheet increases by 1.8% annually in aggregate terms. Credit and deposit balances decrease by 2.4% and 4.4%, respectively.
NON-PERFORMING LOANS: The non-performing loan ratio stands at 11.2% compared to 13.6% in September 2014, with coverage of non-performing loans of 60%, one percentage point higher.
EQUITY. Equity grows 10.7% annually and now represents 9.9% of total balance sheet.
