CONSOLIDATED INCOME STATEMENT
Spanish banks set aside €3.587 billion to address the adverse effects on the economy of the crisis caused by COVID-19, resulting in a negative attributable result of €1.125 billion in the first quarter of 2020.
The significant effort in provisions and write-downs, amounting to more than €5.6 billion, undertaken to strengthen the balance sheet and mitigate the negative effects of the pandemic on households and businesses represents an increase of 160% compared with the same period of the previous year.
Gross income, which represents total income earned, stood at levels similar to those of a year earlier, at around €21 billion, despite the slight reduction in net interest income and net fee and commission income.
The decrease in operating expenses brought the cost-to-income ratio to 47.6% through March, representing an improvement of 1.6 percentage points compared with the same period of the previous year and placing it among the best in Europe, where the average is 64%.
The effort made in provisions and write-downs to strengthen banks’ capacity to respond to the coronavirus and support the economic recovery led to an 85% decline in profit before tax, to €900 million.
CONSOLIDATED BALANCE SHEET
The consolidated balance sheet stood at €2.69 trillion as of March 31, 2020, representing an increase of 3.2% over the year as a whole, amounting to €83 billion.
Loans to customers increased by €32 billion, up 2% year-on-year, to almost €1.6 trillion. Customer deposits grew by 1%, an increase of more than €12 billion, reaching a balance of €1.45 trillion. As a result, the loan-to-deposit ratio edged up to 109%.
The NPL ratio stood at 3.6% of non-performing assets, compared with 4% a year earlier. Following the significant effort in provisions for insolvencies made during the quarter, the coverage ratio rose to 73%, i.e., 6 percentage points higher than in March 2019.
The issuance of marketable securities maintained a good pace, with the outstanding balance growing by 4.8% year-on-year, enabling the financing of 13.7% of total assets. Meanwhile, the balance of funds taken from central banks and credit institutions, net of funds lent, fell to less than €6 billion.
As a result of the quarter’s negative results, accounting equity as of March 31, 2020 is 4.6% lower than that shown on the balance sheet in March of the previous year. The fully loaded highest-quality capital (CET1) ratio (fully loaded) rose to 11.37%, 10 basis points above the previous year’s level.
