The most recent activity data confirm the recovery of the U.S. economy. GDP grew by around 1% in the third quarter and the latest available figures show that the expansion continued at a similar pace in the fourth quarter. Worth noting is the increase in private consumption and residential lending, while there was moderate growth in job creation and a gradual reduction in the unemployment rate. Against this background, the Fed has confirmed that it will start to scale back its expansive monetary policy beginning in early 2014 (the process known as “tapering”). Lastly, on the fiscal front, the political parties have reached an agreement to reduce the fiscal drain expected for 2014 and, thus, the possibility of another government shutdown.
As for exchange rates, the dollar continued to depreciate against the euro in the last quarter, which had a negative impact on the changes in the Group’s financial statements, both over the quarter and in the year as a whole. To better understand the evolution of the business figures, the percentages given below refer to constant exchange rates, unless otherwise indicated.
The last quarter’s figures have confirmed the improvement in the country’s banking system seen throughout the year, with a positive trend in both profits and the sector’s NPA ratio (3.8% at the close of September for commercial banks, compared with 4.7% at the end of 2012). This improvement in bank earnings continues to be supported by higher non-financial revenue (the low interest rates are still having a negative effect on net interest income) and reduced needs for provisions due to the improvement of asset quality across all the portfolios. Lastly, the rate of growth of domestic deposits picked up in the second half of the year.