The attributable result as of June 30, 2010 for Spanish banking groups as a whole amounted to 7,979 million euros, 6.7% lower than that obtained during the first half of the previous year.
Gross margin shows an increase of 4.2%, similar to the growth recorded by average total assets (ATA) of 4.1%, while its profitability remains at 3.57% of ATA. This performance is supported by the growth of the basic components of the income statement, namely net interest income and commissions, which offset the stagnation in income obtained from other gross margin items.
The significant provisioning effort and a slight increase in administrative expenses, which together reduce profitability on ATA by approximately 10 basis points compared to that achieved in June 2009, place the consolidated result for the period at 8,719 million euros. This represents a profitability of 0.80% on ATA compared to 0.88% obtained a year earlier.
The increase in minority interests over the last year (+55%) results in the attributable result to the parent entity of the aforementioned 7,979 million euros, 0.73% on ATA, 570 million euros less than in June 2009.
The consolidated balance sheet, with total assets amounting to 2.26 trillion euros, continues to grow at an annual rate of 5.5%. This growth is notably driven by the increase in customer deposits of 14.3% annually, 133,000 million euros raised primarily by foreign subsidiaries, which are mainly offset by the increase in credit figures of 4.2% annually (57,000 million euros more) and investments in fixed-income securities by another 38,000 million euros (+14%). The weakness in wholesale funding markets is reflected in a decrease of approximately 41,000 million euros in the balance of debts represented by negotiable securities and subordinated liabilities.
Meanwhile, accounting equity continues to grow at annual rates higher than those of the balance sheet, 13.3% since June 2009, and its weight on total assets remains above 6%.
In terms of solvency, this translates into an increase in Tier 1 resources and especially Core Capital, which stood at 8.39% at the end of the first half of 2010, more than 100 basis points above that obtained a year earlier. Non-performing loans in credit investment reach 4.2% on a consolidated basis, approximately 80 basis points higher than in June 2009, while coverage levels remain around 66% (69% a year earlier).
The annual growth of aggregated individual balance sheets was lower than that of the consolidated balance sheet, barely 1.12%, due to the limited variations in deposits, which grow by 0.3%, and credit investment, which grows by 1.4%. The main balance sheet variations over the last 12 months have materialized in the increase in investment in debt securities and in financing obtained from central banks. Non-performing loans as of June 30 stood at 5.18% with a coverage fund representing 58% of doubtful balances.
In the income statement for the first half of the year, the decrease in income obtained from interest and commissions was offset by higher dividends received and good results in financial operations. With contained operating expenses (barely 0.6% annual increase) and a greater provisioning effort for loans, which increased by 44.6% compared to last year, the accounting result as of June 30 amounted to 4,908 million euros, 0.66% of average total assets.
