CONSOLIDATED INCOME STATEMENT
Spanish banks obtained an attributable profit of 3,538 million euros in the first quarter of fiscal year 2019, representing a decrease of 11.4% compared to the same period of the previous year.
With limited balance sheet growth, the slight improvement in net interest income and the reduction in operating costs were not sufficient to offset the lower results obtained from financial operations.
In an environment marked by low interest rates in Europe, net interest income increased 2.7% until March and reached 14,822 million euros, while net fee and commission income decreased 0.5% during this period.
Gross income decreased 1.2% in the first three months of the year and stood at 20,896 million euros, mainly due to the decrease in results from financial operations and the reduction in other net operating income.
Despite average balance sheet growth of more than 1.5% year-on-year, operating expenses were reduced by 1%, which has allowed the efficiency ratio to be maintained at 49.2%, among the best of all banking systems in the European Union.
Provisions and impairment charges for asset deterioration increased 7.1% in the first three months of the fiscal year, while return on equity (ROE) stood at 7.01%, compared to 7.97% for the same period a year earlier.
CONSOLIDATED BALANCE SHEET
The consolidated balance sheet of Spanish banking groups exceeded 2.6 trillion euros as of March 31, 2019, with year-on-year growth of 3.2% significantly supported by the increase in items representing typical retail commercial banking activity.
Both customer loans and deposits grew above 5%, while the balance of debt securities issued increased 9% year-on-year. Customer loans reached 1.6 trillion euros until March, representing 5.2% more year-on-year and accounting for almost 60% of total balance sheet assets.
The non-performing loan ratio stood slightly below 4% after a reduction of more than half a percentage point compared to the rate a year earlier, with a coverage level equivalent to 67.4% of doubtful assets, compared to 68.7% the previous year.
Customer deposits stood above 1.4 trillion euros, 5.5% more than in March 2018, representing more than 55% of the total balance sheet and allowing the loan-to-deposit ratio to be maintained at 108%.
The balance of debt securities other than shares issued has increased by 30,000 million euros, 9.3% over the last twelve months, to a volume of more than 350,000 million euros. Conversely, net funding obtained from central banks and credit institutions has been reduced to a net balance of 13,000 million euros, barely 0.5% of the total balance sheet, with an annual decrease of 35,000 million euros.
As of March 31, 2019, shareholders’ equity amounted to 192,000 million euros, with an annual increase of 1.7%. Expressed in terms of solvency ratio, the highest quality capital ratio CET1 fully loaded stood at 11.3%, representing 20 basis points more than a year earlier.
