In the first nine months of the current year, Spanish banking groups recorded attributable profit of \u20ac6.702 billion, representing an increase of 98.3% compared with the same period in 2012.<\/p>\n
The exceptional provisioning effort made in 2012, as a result of the implementation of the two Royal Decree-Laws on extraordinary measures to strengthen the financial sector, distorts the year-on-year comparison of attributable profit for the two years. Nevertheless, the volume of provisions and allocations set aside during the first nine months of 2013, amounting to \u20ac17.976 billion, although 29.8% lower than those recorded in the previous year, remains at very high levels, above the average of recent years, and represents 1% of average total assets (ATA). <\/p>\n
Low interest rates and a slightly improved economic environment, though still adverse for banking activity, continued to put downward pressure on margins. In the first nine months of the year, both income and financial costs fell by 11.8% and 11.4%, respectively, resulting in a reduction in net interest margin to 1.95% of ATA, 25 basis points less than a year earlier. In the same vein, net fee and commission income was 6.2% lower than in September 2012. <\/p>\n
The remaining components of gross income showed mixed performance, as lower dividends and other operating results, negative on a net basis, were more than offset by the strong performance of financial operations results, gains on foreign exchange differences, and results from associates. Overall, consolidated gross income of Spanish banks reached \u20ac55.622 billion, 6.8% lower than in September 2012. In terms of return on ATA, this implies a decline from 3.3% to the current 3.1%. <\/p>\n
Containment of operating expenses (+0.3%) and the 30% decrease in allocations and provisions mentioned above brought operating profit to \u20ac9.699 billion, 56.1% higher than a year earlier, implying an increase in return on ATA from 0.34% in September 2012 to the current 0.54%.<\/p>\n
The strong performance of non-recurring results (from asset sales and discontinued operations) partly offset the significant increase in corporate income tax expense, which rose to \u20ac2.107 billion. As a result, Spanish banks\u2019 consolidated profit for the year stood at \u20ac8.226 billion. After deducting the portion attributable to minority interests, attributable profit rose to \u20ac6.702 billion. <\/p>\n
With regard to the consolidated balance sheet, the total balance declined by 7.7% compared with September of the previous year. On the liabilities side, this reduction reflects a positive development in financial autonomy, following a decrease of \u20ac93.345 billion in deposits taken from central banks and an increase of \u20ac26.764 billion in customer deposits, so that the deposits-to-loans coverage ratio improved by 10 percentage points over the last twelve months to reach 89%. <\/p>\n
On the assets side, lower credit demand and subdued growth in economic activity led to a reduction of \u20ac132.899 billion in customer lending, representing a 9% decrease compared with the loan book in September 2012. The non-performing loan ratio, affected by the adverse economic environment and the reduction in the denominator of the ratio, rose to 8.2%, 207 basis points higher than a year earlier, with a coverage ratio of 57%. <\/p>\n
Spanish banks have continued to strengthen their solvency position, as shown by a 0.5% year-on-year increase in equity, now equivalent to 7.1% of total assets. This increase is even more significant in terms of regulatory capital, with a BIS ratio of 13.6% and core capital of 11.5%, 100 basis points higher than in the previous year. <\/p>\n
In summary, as of September 2013 Spanish banks show a somewhat smaller consolidated balance sheet that is healthier, more solvent, and more financially balanced.<\/p>\n
As for the aggregate of individual balance sheets, the trend is similar to that seen in the consolidated balance sheet. Total assets therefore contracted by 9.3% to \u20ac1.474089 trillion. <\/p>\n
Once again, lending and the outstanding balance of securities issued recorded the largest changes. The former decreased by \u20ac91.923 billion (10.7% year-on-year), which, together with the increase in deposits raised, made it possible to reduce the net balance taken from central banks by \u20ac79.293 billion (53%). As for securities issued, the outstanding balance fell by \u20ac53.911 billion, 24.4% compared with September 2012. <\/p>\n
Still difficult economic conditions, together with the reduction in the stock of credit, caused the non-performing loan ratio to continue rising, reaching 13.2% at the end of the third quarter, an increase of 372 basis points over the last twelve months. Meanwhile, the coverage ratio increased to 62%. <\/p>\n
Customer deposit gathering has maintained its upward trend, with the balance increasing by \u20ac42.322 billion (6.3%), implying an improvement in the deposits-to-loans coverage ratio from 78% in September 2012 to 93% at the end of September 2013.<\/p>\n
For the reasons already explained for the consolidated income statement, the individual income statement shows a decrease in net interest income and gross income of 23.3% and 12.8%, respectively. Operating profit rose to \u20ac3.187 billion as a result, on the one hand, of containment of operating expenses (-0.4%) and, on the other, of the decrease in the volume of allocations and provisions which, nevertheless, rose to \u20ac9.122 billion (0.8% of ATA). <\/p>\n
After extraordinary results and the tax impact, Spanish banks\u2019 profit in the first nine months of the year was \u20ac3.102 billion, almost three times higher than in the same period of the previous year.<\/p>\n
The high provisions made, amounting to \u20ac18 billion, were lower than the exceptionally large provisions in 2012, but still remain above the average of recent years.<\/p>\n","protected":false},"featured_media":0,"parent":0,"template":"","etiquetas-prensa":[805,917,803],"class_list":["post-38641","notas-de-prensa","type-notas-de-prensa","status-publish","hentry","etiquetas-prensa-results","etiquetas-prensa-solvency","etiquetas-prensa-spanish-banking"],"yoast_head":"\n