Attributable profit for the AEB member banking groups amounts to €3,465 million in the first quarter of 2017, representing a 17% increase compared with the same period the previous year. The consolidated income statement shows improvements across all key activity-related margins, both in amounts and in return on average total assets (ATA), reflecting an average balance sheet similar to that of the same quarter of the previous year.
As a result of higher financial income, net interest income, close to €15,000 million for the quarter, rises to 2.28% of average total assets. This figure is 6.7% higher than that recorded last year, i.e., 16 basis points more than in March 2016. Fees, which have grown at an annual rate of 13%, also contribute €4,834 million to the income statement. This represents 74 basis points of return on average assets, 9 more than in March 2016.
Net trading income, excluding that related to exchange rate differences, has been generated equally by the trading portfolio and the available-for-sale assets portfolio, contributing €1,720 million to the positive performance of gross income. Trading income represents 27 basis points of ATA, five more than a year earlier.
Containment of operating expenses has kept their growth to an annual rate of 3.6%, below the 9.2% increase recorded for gross income. This allows the efficiency ratio to return to levels below 50%.
The intensity of provisioning and allocations remains, representing 0.79% of ATA in the quarter. This percentage is higher than in the first quarter of 2016. However, it is 6 basis points lower than the average quarterly effort made over the previous financial year as a whole.
After taxes, profit for the period rises to €4,381 million, representing an ROA of 0.67%, compared with 0.55% in March 2016, while ROE reaches 7.05%, 85 basis points higher than a year earlier, with average equity 3% higher than in the same quarter of the previous year.
The aggregate consolidated balance sheets of the AEB member banking groups continue to grow moderately, as in the previous two financial years, with total assets increasing by just 0.08% over the last twelve months.
Customer lending, €1.5 trillion, increases by 1.1% year-on-year, while customer deposits, €1.4 trillion, rise by 1.8%. In turn, the loans-to-deposits ratio (LtD ratio) remains at 110%, while the difference between the two (the so-called commercial gap) narrows slightly, by €7,114 million, and represents less than 9% of lending.
Non-performing loans decrease by more than half a percentage point, bringing the NPL ratio to 5.5%. Coverage stands at 66% of doubtful balances, 2 percentage points higher than a year ago.
The net borrowing position with central banks and credit institutions, with an aggregate net balance of €81,719 million, has been reduced by €20,021 million (almost 20%) since March 2016. In a similar order of magnitude, both issued marketable securities (-€14,055 million) and fixed-income instrument portfolios (-€20,140 million) have also declined. The reduction in the latter has been accompanied by positive structural changes in the held-to-maturity investment portfolio, which has doubled its balance over the last twelve months.
AEB banking groups have continued to strengthen their equity, a process they have maintained uninterruptedly since the start of the crisis. At the end of March 2017, they were at levels very close to the peak reached in September 2016, both in absolute recorded values—more than €197,484 million—and in their share of total assets, 7.6%.
Meanwhile, eligible own funds, measured by the CET1 ratio, stand at 11.8%. This is 30 basis points lower than a year earlier after the adjustments and write-downs carried out at the close of the 2016 financial year.
Profit for the period recorded by Spanish banks reached €2,260 million in the first quarter of 2017, 12.8% higher than a year earlier.
While net interest income remains at €3,277 million (0.94% of ATA), as in March 2016, net fees and commissions rose by 9.4% to €1,563 million. This increase was driven by income growing more than expenses.
Core income, representative of typical banking activity and consisting of the sum of interest, fees and commissions, and dividends, increases to €7,104 million, compared with €6,843 million in March of the previous year.
Net trading income increased by 40.5%, reaching €989 million. Operating expenses, meanwhile, remained stable at €3,689 million, a figure similar to the expenses recorded a year earlier.
All of this means that operating profit before provisions for Spanish institutions on an individual basis rose by 13.9%. This increase represents an improvement of €536 million compared with that recorded in March 2016. The efficiency ratio stands at 45.6%, compared with 48.7% a year earlier.
Credit risk provisions recorded during the period have continued the average trend of recent quarters. Institutions increased their allocations by 12.3%, reaching a total of €1,368 million at the end of the first quarter of 2017.
These figures explain profit of €2,260 million at the end of the period, 12.8% higher than in the previous period. ROA stands at 0.65%, 10 basis points higher than that recorded in March 2016.
With regard to the individual balance sheet of AEB member banks, total assets amount to €1.41 trillion, representing a decrease of €36,000 million since March 2016.
In terms of customer lending, the balance rises from €714,559 million in March 2016 to €723,879 million at the current date, representing a slight increase of 1.3%.
On the liabilities side, customer deposits have increased by virtually the same proportion as lending, 1.4%, reaching €692,608 million. The loans-to-deposits ratio (LtD ratio) remains at 104.5%, a figure similar to the levels a year earlier.
The NPL ratio has fallen to 9.74%, from 10.54% in the first quarter of last year, with coverage now reaching 63%, up from 57% in March 2016. These data continue the trend seen in the most recent periods analysed.
Lastly, the growth in equity observed in previous periods continues, now reaching €147,082 million and representing 10.4% of the balance sheet, a record high as a share of total assets.
