Consolidated income statement
Spanish banks recorded attributable profit of €6.779 billion in the first half of 2019, representing a 4.8% decline compared with the same period of the previous year.
The higher extraordinary provisions made in the second quarter and the lower results from financial transactions explain this performance, also marked by the containment of operating expenses.
With average balance sheet growth of 2.7% year-on-year, net interest income maintained its upward trend and rose by 3.8% compared with June of the previous year, to exceed €30 billion.
Fee income remained stable, while results from financial transactions, net of exchange rate differences, were around €670 million lower than a year earlier, mainly due to lower profits from trading activity.
All these factors, together with the decrease in other operating results, placed gross income at €41.797 billion in the first half of the year, a figure similar to that of the same period of the previous year.
The containment of operating expenses brought the efficiency ratio to 49.5%, an improvement of 20 basis points compared with June 2018, placing it among the best across banking systems in the European Union.
The extraordinary provisions made in the second quarter of the year led total provisions to increase by 9.2% year-on-year, despite an impairment of financial assets similar to that of the first half of 2018.
The income statement is rounded out by higher gains from the sale of non-financial assets and non-current assets, around €320 million above those recorded a year earlier, and a 2.2% year-on-year increase in corporate income tax expense.
Following a 5.9% year-on-year decrease in the result attributable to minority interests, attributable profit represents a return on equity (ROE) of 6.7%, compared with 7.1% a year earlier.
Consolidated balance sheet
The consolidated balance sheet stood at €2.63 trillion as of 30 June 2019, with year-on-year growth of 4.3%, reflected in the evolution of the most representative balance sheet aggregates of Spanish banks’ core activity.
Customer lending increased by €56 billion over the last twelve months, up 3.8%. The non-performing loan ratio stood at 3.9%, compared with 4.4% a year earlier, with coverage levels similar to the previous year, at around 67% of doubtful assets. Investment in fixed-income securities led to an additional increase in balance sheet assets of a further €23 billion compared with June 2018.
Customer deposits grew by €61 billion, up 4.4%, bringing the loans-to-deposits ratio below 108%. Meanwhile, debt securities issued showed, as of 30 June, an outstanding balance above €356 billion, with year-on-year growth of 9.8%.
During the first half of the year, the intense process of reducing the aggregate net position with central banks and credit institutions continued, reaching a net borrowing balance of less than €4 billion at the end of the quarter.
Equity has maintained its share of 7.4% of the total consolidated balance sheet, with an increase of €6.090 billion over the last twelve months, up 3.2%. The highest-quality capital ratio, expressed in terms of CET 1 fully loaded, stood at 11.4%, which is 50 basis points above the level recorded a year earlier.
