CUSTOMER DEPOSITS HAVE INCREASED BY 13% AND HAVE ENABLED A 7-POINT IMPROVEMENT IN THE LOAN-TO-DEPOSIT RATIO TO REACH A LEVEL OF 82%<\/p>\n
SOLVENCY CONTINUED TO IMPROVE: CORE CAPITAL ADVANCED 90 BASIS POINTS AND THE CAPITAL SURPLUS OVER REQUIRED EQUITY RESOURCES NOW STANDS AT 53,304 MILLION EUROS<\/p>\n
Spanish banking groups obtained an attributable profit of 3,714 million euros in the first quarter of 2011, 4.5% lower than that recorded in the same period of the previous year. These results have been accompanied by sustainable balance sheet growth, which has been financed through the most stable and highest-quality sources.<\/p>\n
The solvency of Spanish banking groups has continued to improve in the first three months of the year. Core capital\u2014the most stringent ratio\u2014increased by 90 basis points over the last year to stand at 9.42%. With regard to the Tier 1 ratio, the level rose to 10.38% after recording growth of 57 basis points during the period. The surplus over required equity resources reached 38%, or in other words, a surplus of 53,304 million euros. <\/p>\n
As of March 31, 2011, the consolidated balance sheet amounted to 2.2 trillion euros, representing growth of 71,973 million euros (+3.3%) compared to that existing one year earlier. Of that 71,973 million euro increase in assets, 60% (43,260 million euros) has been allocated to increasing customer lending, which is equivalent to a rise of 3.2% compared to the balance in March 2010. <\/p>\n
Customer deposits have registered a significant increase of 134,664 million euros (+13.4%), which has made possible the aforementioned credit growth, while also facilitating an improvement in the treasury position with central banks and other credit institutions amounting to 54,018 million euros. Likewise, it has enabled reduced reliance on resources obtained through the issuance of negotiable securities, whose balance has fallen by 52,736 million euros. <\/p>\n
The substantial changes experienced in the balance sheet composition have as a direct consequence an improvement of seven percentage points in the deposit-to-loan coverage ratio to reach a level of 82%.<\/p>\n
The strengthening of the balance sheet’s financial structure is accompanied by an increase in accounting equity of 7.6%. This increase is based on growth in equity of 15,230 million euros (11.7%), which banking institutions have obtained through direct appeals to capital markets and through organic generation of results. <\/p>\n
The loan non-performing ratio increased by 23 basis points to stand at 4.45%. This slight growth contrasts with the 120 basis points by which this ratio advanced in the first quarter of 2010 and thus shows a slowdown in the pace of increase in non-performing loans. Coverage, meanwhile, remains practically stable, after experiencing a slight decrease of 3 percentage points to reach 63%. <\/p>\n
With regard to the income statement, high recurrence is observed insofar as it does not present major variations compared to that published one year ago. Thus, the interest margin registers a very slight decrease of 0.8%, while the gross margin experiences an advance of 1.9% as a result of the good performance of commissions and foreign exchange income. <\/p>\n
The lower effort required in provisions for credit investments, which was very high in the previous year, partially offsets the moderate growth in operating expenses and places the operating income at 5,657 million euros, 4.7% lower than in the first quarter of 2010. This evolution of operating expenses establishes the efficiency ratio at 45.6%. <\/p>\n
Meanwhile, the greater effort made in provisions for other assets has been offset by higher income from non-recurring operations and by lower corporate tax expense, which contributes to the consolidated attributable profit of Spanish banking groups reaching 3,714 million euros, only 4.5% lower than one year earlier.<\/p>\n
Finally, the individual income statement presents, in essence, the same main lines as the consolidated accounts. Thus, pre-tax profit, at 2,100 million euros in the quarter, experiences a slight increase of 3% compared to that obtained in March 2010. <\/p>\n