{"id":38661,"date":"2011-06-20T00:00:00","date_gmt":"2011-06-19T22:00:00","guid":{"rendered":"https:\/\/aebanca.es\/actualidad\/notas-de-prensa\/summary-of-the-aeb-secretary-generals-remarks-on-spanish-banks-results-as-of-march-2011\/"},"modified":"2026-04-09T09:40:57","modified_gmt":"2026-04-09T07:40:57","slug":"summary-of-the-aeb-secretary-generals-remarks-on-spanish-banks-results-as-of-march-2011","status":"publish","type":"notas-de-prensa","link":"https:\/\/aebanca.es\/en\/actualidad\/notas-de-prensa\/summary-of-the-aeb-secretary-generals-remarks-on-spanish-banks-results-as-of-march-2011\/","title":{"rendered":"Summary of the AEB Secretary General\u2019s remarks on Spanish banks\u2019 results as of March 2011"},"content":{"rendered":"

“Spanish banks\u2019 results can be considered good if the difficult economic environment in which banking activity is taking place is taken into account” <\/strong><\/p>\n

“Spanish banks have focused their strategy on improving their financial and liquidity structure by attracting customer deposits, thereby stabilising their funding sources and reducing wholesale funding” <\/strong><\/p>\n

“The Spanish banking sector\u2019s ability to generate top-tier capital on a recurring, organic basis is very positive, even in economic circumstances as challenging as the current one” <\/strong><\/p>\n

The AEB Secretary General, Pedro Pablo Villasante, stated today that the results and returns achieved by Spanish banks in the first quarter of this year can be considered good, taking into account the difficult economic environment and the slow recovery that is negatively affecting the development of banking activity.<\/p>\n

The contraction in household consumption and business investment is translating for banks into a widespread decline in credit demand and a deterioration in the quality of their portfolios, which is still leading to increases in non-performing loans, albeit at a slower pace, and requires significant provisions, the AEB Secretary General explained.<\/p>\n

This difficult economic environment was reflected in a slight decline in banks\u2019 profits at the end of the first quarter; however, Villasante highlighted that both consolidated results and gross income show good progress and a favourable trend compared with those recorded in the last two quarters of 2010.<\/p>\n

In any event, the AEB executive recalled that during the four years of the economic and financial crisis, Spanish banks have continued to make profits\u2014something they have achieved through their own means and without the need to receive injections of public capital.<\/p>\n

In recent months, Spanish banks\u2019 strategy has focused on improving their financial and liquidity structure by attracting customer deposits to provide greater stability to their funding sources and reduce wholesale funding. Nevertheless, he noted that Spanish banks are taking advantage of every opportunity to obtain market funding when markets calm down, which has enabled them to substantially reduce their recourse to the European Central Bank and to pre-fund upcoming maturities. <\/p>\n

“Financial markets have not been functioning properly since the start of the crisis. There is a great deal of distrust and risk aversion, exacerbated by the tension caused by the need to rescue Portugal and by the new aid to Greece, which leads markets to demand high prices and occasionally come to a standstill,” Villasante commented.<\/p>\n

In his view, market distrust reflects not only doubts about each country\u2019s intrinsic situation, but also existing doubts about the European Union\u2019s and the Eurozone\u2019s ability to resolve their governance problems and move towards economic integration that supports their Monetary Union.<\/p>\n

In the first quarter, Spanish banks continued to strengthen their already high capital solvency, which has been an essential part of their strategy since financial turbulence began in August 2007. In these first months of the year, they once again increased their core capital, i.e., the highest-quality portion of their own funds. <\/p>\n

Villasante insisted that banks are making this increase through their own means, without any kind of public assistance, through a policy of capitalising a large part of the profits generated, reducing risk-weighted assets, and tapping financial markets with new capital issues. “The Spanish banking sector\u2019s ability to generate top-tier capital on a recurring, organic basis is very positive, especially in economic circumstances as challenging as the current one,” he concluded. <\/p>\n

In this regard, the AEB Secretary General welcomed the fact that no Spanish bank has needed to resort to additional FROB capital to meet the new capital requirements established in the Royal Decree-Law on Strengthening the Financial System.<\/p>\n

On solvency, he stressed that Spanish banks continue to make a significant provisioning effort by charging substantial provision funds to the income statement, which in the first quarter of 2011 exceeded the amount of consolidated net profit. In addition, all extraordinary profits obtained have been allocated to write-downs to prudently offset asset impairment, estimated using strict write-down criteria. <\/p>\n

As for the evolution of non-performing loans, Villasante indicated that a slowdown is beginning to be observed in the pace of new entries into default and unpaid maturities, while coverage levels have remained virtually stable.<\/p>\n

In his view, however, the most important factor is the Spanish banking sector\u2019s ability to generate ordinary, recurring results, which allows it to remain profitable while continuing to sustain the substantial write-downs required. Net interest income remains the driver of Spanish banks\u2019 results, despite the slowdown in credit growth. <\/p>\n

As for credit, he endorsed the Bank of Spain\u2019s forecast that it will continue to trend downward in the coming months, although credit investment in companies not related to the real estate or construction sector appears to be starting to pick up.<\/p>\n

“Pedro Pablo Villasante also commented on the forthcoming publication of the new stress tests that the recently established European Supervisory Authority will carry out on European banks. He recalled that Spain will once again undertake an exercise of maximum transparency, as virtually the entire Spanish banking system will participate in these tests, unlike in other European countries. On the other hand, he noted that if the new stress tests do not contemplate a default on European sovereign debt, as happened last year, the tests will not help to allay market distrust.” <\/p>\n

In this regard, he warned that under no circumstances should the results of the stress tests be used to call into question the accuracy of the published financial statements of credit institutions, which are governed by the strict accounting rules in force in Europe.<\/p>\n

As for the Spanish economy, the AEB Secretary General noted that it is recording slower and less robust growth than that experienced by other developed countries\u2014”growth that, unfortunately, is not sufficient to reduce our extremely high unemployment rate”. He therefore considered it necessary to persevere with the measures adopted by the Government in May 2010 to correct the public deficit, which, in his view, must be accompanied by those structural reforms that will reduce the risk premium while improving competitiveness in order to take advantage of the recovery in the global economy. <\/p>\n","protected":false},"excerpt":{"rendered":"

The AEB Secretary General, Pedro Pablo Villasante, stated today that the results and returns achieved by Spanish banks in the first quarter of this year can be considered good, taking into account the difficult economic environment and the slow recovery that is negatively affecting the development of banking activity.<\/p>\n","protected":false},"featured_media":0,"parent":0,"template":"","etiquetas-prensa":[918,925,805],"class_list":["post-38661","notas-de-prensa","type-notas-de-prensa","status-publish","hentry","etiquetas-prensa-deposits","etiquetas-prensa-investments","etiquetas-prensa-results"],"yoast_head":"\nSummary of the AEB Secretary General\u2019s remarks on Spanish banks\u2019 results as of March 2011 - Asociaci\u00f3n Espa\u00f1ola de Banca<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/aebanca.es\/en\/actualidad\/notas-de-prensa\/summary-of-the-aeb-secretary-generals-remarks-on-spanish-banks-results-as-of-march-2011\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Summary of the AEB Secretary General\u2019s remarks on Spanish banks\u2019 results as of March 2011 - 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