The attributed profit of the banking groups that are members of AEB amounted to €6,964 million during the first half of 2017, with an 18.6% increase over the same period of the previous year.
The increase in results recorded as of June 2017 is explained primarily by the strong performance of the most recurring items in the profit and loss statement—net interest income and net fee and commission income—which have offset lower results from financial operations and the increase in tax expenses. To a lesser extent, the declining trend in provisions for impairment and the containment of operating expenses have also contributed to the increase in results compared to the same half of 2016.
Net interest income, close to €29,000 million during the first six months of the year, grows at a rate of 4.4% annually and represents a return on average total assets (ATA) of 2.24%, with an improvement of 12 basis points compared to June of the previous year, supported primarily by the reduction in financial costs.
Fee and commission income contributes, in net terms, 74 basis points of return on ATA, 7 more than a year earlier, with an 8.4% annual increase in amount.
The combined effect of lower results from financial operations, 8 basis points of return below the previous year, together with slight increases in foreign exchange results and other operating income, places gross margin at €42,235 million, 3.1% higher than that obtained in June 2016.
This growth in gross margin, combined with the containment of operating expenses, similar to those incurred in the first half of the previous year, places the efficiency ratio at 48.2%, with a year-on-year improvement of slightly more than one percentage point.
Provisions and allowances for impairment continue the declining trend that, with occasional exceptions, has been observed during previous quarters. The effort recorded in the first half of the year at €9,347 million represents 0.72% of ATA, barely 4 basis points less than in the same period of the previous year.
Below the operating profit line, better results from sales of non-financial assets contribute an additional 2 basis points to profitability and, significantly, tax expenses increase by more than 25% annually and reduce the half-year result by 6 basis points more than in 2016.
Net profit, at €8,627 million, is 18.6% higher than that achieved in June 2016 and represents an ROA of 0.67%, compared to 0.56% a year earlier. ROE stands at 7.15%, one percentage point above that achieved during the same period of the previous year.
Total assets of the AEB banking groups stood at €2.5 trillion as of June 30, 2017, 4% lower than that recorded in June 2016.
During the last twelve months, the balance of customer loans has decreased by 2.4%, standing at €1.5 trillion. Customer deposits have remained at levels similar to those of the previous year, €1.4 trillion, with a decrease of barely 0.6%. The loan-to-deposit ratio (LtD ratio) stood at 110%, two percentage points lower than in June 2016.
At the end of the half-year, the non-performing loan ratio stood at 5.2%, compared to 5.9% in June 2016, and the coverage ratio reached 66% of non-performing assets, two percentage points more than a year earlier.
Following the resolution and sale of one of the member banks, the aggregate balance sheets of AEB banking groups present, on a consolidated basis, equity of €184,804 million, 7.2% lower than that resulting from the aggregation of balance sheets in June 2016, a variation explained in part by the increase in negative reserves from translation differences and in part by the decrease in accounting equity, of 3.9% annually, due to the aforementioned scope effect.
The highest quality capital ratio, known as CET1, stood at 12%, 15 basis points less than a year earlier, while the BIS ratio, of total capital, improved by a similar amount to reach 14.9% as of June 30, 2017.
