IN AN ENVIRONMENT OF ECONOMIC STAGNATION AND TENSION IN THE FINANCIAL MARKETS, SPANISH BANKS AS OF SEPTEMBER 30:
HAVE OBTAINED AN ATTRIBUTABLE PROFIT OF 9,328 MILLION EUROS, REPRESENTING A 15.4% DECREASE COMPARED TO THE SAME PERIOD IN 2010
THEY HAVE CONTINUED TO IMPROVE THEIR SOLVENCY THROUGH AN INCREASE IN THEIR OWN FUNDS OF 18,056 MILLION. THE SECTOR’S CORE CAPITAL NOW STANDS AT 9.32%.
HAVE MANAGED TO INCREASE CUSTOMER DEPOSITS BY 6.1%, ALLOWING THEM TO IMPROVE THE DEPOSIT-TO-LOAN RATIO TO 80.94%
The attributable profit of the aggregate of Spanish banking groups amounted to 9,328 million euros as of September 30, 2011, 15.4% lower than that recorded in the first nine months of 2010. This result was achieved in a difficult and uncertain economic environment, still marked by stagnant activity and persistent tensions in financial markets.
The net interest income remains at levels similar to those of the previous year, just 0.1% lower in amount, while commissions show a good performance, with an increase of 5.9% compared to September 2010.
This evolution has allowed the gross margin—the most recurring part of the income statement—to reach 56,253 million, only 1.3% lower than that obtained in the same period of 2010, despite lower results from financial operations and exchange rate differences. Meanwhile, the operating activity result decreased by 1,448 million euros (8.8%) compared to a year ago, as a consequence of the increase in operating expenses. These were affected by inflation rates and exchange rates of foreign businesses and could only be partially offset by lower provisions and asset impairment losses recorded during the period.
Overall, the effort in provisions, write-offs, and allowances for impairment of both financial and non-financial assets amounted to 16,140 million euros, an amount slightly lower (7%) than that recorded a year ago.
Lower extraordinary results and lower corporate income tax expenses place the consolidated result for the period at 10,542 million euros, which is equivalent to a ROA (return on average total assets) of 0.63% in annual terms. Meanwhile, the return on average equity (attributable ROE) stands at 8.56% annually, 2.75 percentage points lower than that recorded as of September 30, 2010.
To explain this decrease in ROE, the increase of 18,056 million euros in accounting equity must be kept in mind, which represents a 13.6% increase compared to the balance existing as of September 30, 2010. Additionally, this increase in higher-quality equity (capital and reserves) is due, in equal measure, to organic capital generation and the raising of new resources in the markets. This explains how core capital rose from 8.35% in September 2010 to 9.32% on the same date in 2011, and that the BIS Ratio increased by 19 basis points to stand at 12.61%.
The total balance sheet increased by 50,538 million euros in final balances (2.3%), of which 33,497 million were allocated to customer credit, representing a 2.4% increase in this item, in line with the growth of the balance sheet. This increase in the balance sheet and the lower issuance of securities carried out, amounting to 43,190 million, were financed, firstly, by an increase in customer deposits of 64,849 million euros (6.1%); secondly, through an increase in the net borrowing position with financial institutions of 22,812 million; and finally, thanks to the increase in accounting net worth of 10,640 million euros.
The evolution of loans and deposits explained above places the deposit-to-loan coverage at 80.94%, higher than the 78.18% from a year earlier. The non-performing loan (NPL) ratio as of September 30, 2011, rose 38 basis points to reach 4.65%, while the coverage ratio decreased by seven percentage points to 59.42%.
Meanwhile, the result for the period in the aggregate of individual profit and loss accounts reached 4,294 million, 33.7% lower than that recorded a year earlier. This result is in line with the lower activity of the last twelve months, as evidenced by the 0.4% contraction in the balance sheet, the 1.3% decrease in customer credit, and the 2.3% increase in deposits compared to the balances existing in September 2010.
The non-performing loan ratio for credit to other resident sectors stood at 6.19% as of September 30, 2011, with 52% coverage for the aggregate of individual balance sheets.
