Highlights
- Good performance in lending.
- Positive trend of net interest income, in an environment of negative interest rates.
- Moderated growth of the operating expenses.
- Improvement of asset quality indicators.
Financial statements and relevant business indicators (Millions of euros and percentage)
| Income statement |
1H19 |
∆% |
1H18 |
| Net interest income |
84 |
2.2 |
83 |
| Net fees and commissions |
69 |
(12.7) |
79 |
| Net trading income |
60 |
10.2 |
55 |
| Other operating income and expenses |
6 |
n.s. |
(0) |
| Gross income |
220 |
1.4 |
217 |
| Operating expenses |
(142) |
1.3 |
(140) |
| Personnel expenses |
(69) |
3.3 |
(67) |
| Other administrative expenses |
(64) |
(8.4) |
(70) |
| Depreciation |
(9) |
183.9 |
(3) |
| Operating income |
78 |
1.5 |
77 |
| Impaiment on financial assets not measured at fair value through profit or loss |
(11) |
n.s. |
14 |
| Provisions or reversal of provisions and other results |
1 |
(41.4) |
2 |
| Profit/(loss) before tax |
69 |
(26.1) |
93 |
| Income tax |
(13) |
(59.3) |
(33) |
| Profit/(loss) for the year |
55 |
(8.0) |
60 |
| Non-controlling interests |
- |
- |
- |
| Net attributable profit |
55 |
(8.0) |
60 |
| Balance sheets |
30-06-19 |
∆% |
31-12-18 |
| Cash. cash balances at central banks and other demand deposits |
217 |
(9.0) |
238 |
| Financial assets designated at fair value |
511 |
1.3 |
504 |
| Of which: Loans and advances |
- |
- |
- |
| Financial assets at amortized cost |
19,144 |
7.6 |
17,799 |
| Of which: Loans and advances to customers |
17,552 |
5.7 |
16,598 |
| Inter-area positions |
- |
- |
- |
| Tangible assets |
94 |
137.8 |
39 |
| Other assets |
244 |
(4.2) |
254 |
| Total assets/liabilities and equity |
20,209 |
7.3 |
18,834 |
| Financial liabilities held for trading and designated at fair value through profit or loss |
43 |
2.9 |
42 |
| Deposits from central banks and credit institutions |
879 |
(30.9) |
1,271 |
| Deposits from customers |
4,294 |
(11.9) |
4,876 |
| Debt certificates |
985 |
n.s. |
213 |
| Inter-area positions |
12,660 |
11.0 |
11,406 |
| Other liabilities |
532 |
97.2 |
270 |
| Economic capital allocated |
817 |
7.9 |
757 |
| Relevant business indicators |
30-06-19 |
∆% |
31-12-18 |
| Performing loans and advances to customers under management (1) |
17,542 |
6.0 |
16,553 |
| Non-performing loans |
365 |
(15.1) |
430 |
| Customer deposits under management (1) |
4,294 |
(11.9) |
4,876 |
| Off-balance sheet funds (2) |
454 |
17.2 |
388 |
| Risk-weighted assets |
16,405 |
6.0 |
15,476 |
| Efficiency ratio (%) |
64.5 |
|
69.3 |
| NPL ratio (%) |
1.4 |
|
1.7 |
| NPL coverage ratio (%) |
98 |
|
83 |
| Cost of risk (%) |
0.12 |
|
(0.11) |
- (1) Excluding repos.
- (2) Includes mutual funds, pension funds and other off-balance sheet funds.
Activity and results
The most relevant aspects of the activity and results in the area during the first half of 2019 were:
- Lending activity (performing loans under management) recorded an increase of 6.0% in the first half of 2019 (up 5.5% year-on-year), thanks, above all, to the good performance in Asia.
- Credit risk indicators improved in the first six months of the year: the NPL ratio closed at 1.4% and the NPL coverage ratio at 98% (1.7% and 83%, respectively at the end of December 2018).
- Customer deposits under management fell by 9.9% in the first half of 2019, affected by the negative interest rate environment in Europe.
- Regarding results, net interest income (up 2.2% year-on-year) and NTI (up 10.2% year-on-year) performed strongly, thanks to the contribution of commercial activity in the Global Markets unit, partially offset by a reduction in net fees and commissions. Operating expenses showed a moderate growth due to the continuous management of discretionary spending. The impairment on financial assets line showed an increase compared to the first six months of the previous year. The comparison is affected by the release of provisions in the first half of 2018, due to lower loan-loss provision requirements in Europe. As a result, the area's cumulative net attributable profit for the first half of 2019 was €55m (down 8.0% year-on-year).
