Highlights
- Good performance in lending.
- Positive trend of net interest income, in an environment of negative interest rates.
- Controlled growth of operating expenses.
- Improved risk indicators.
Financial statements and relevant business indicators (Millions of euros and percentage)
| Income statement |
Jan.-Sep. 19 |
∆% |
Jan.-Sep. 18 |
| Net interest income |
130 |
3.6 |
126 |
| Net fees and commissions |
105 |
(7.6) |
114 |
| Net trading income |
94 |
21.4 |
77 |
| Other operating income and expenses |
9 |
n.s. |
1 |
| Gross income |
338 |
6.4 |
318 |
| Operating expenses |
(212) |
(0.6) |
(214) |
| Personnel expenses |
(103) |
1.9 |
(101) |
| Other administrative expenses |
(96) |
(11.0) |
(108) |
| Depreciation |
(13) |
191.6 |
(5) |
| Operating income |
126 |
21.1 |
104 |
| Impaiment on financial assets not measured at fair value through profit or loss |
(7) |
(26.2) |
(9) |
| Provisions or reversal of provisions and other results |
10 |
193.3 |
3 |
| Profit/(loss) before tax |
129 |
31.2 |
98 |
| Income tax |
(27) |
(29.9) |
(38) |
| Profit/(loss) for the year |
103 |
69.4 |
61 |
| Non-controlling interests |
- |
- |
- |
| Net attributable profit |
103 |
69.4 |
61 |
| Balance sheets |
30-09-19 |
∆% |
31-12-18 |
| Cash. cash balances at central banks and other demand deposits |
228 |
(4.1) |
238 |
| Financial assets designated at fair value |
494 |
(1.9) |
504 |
| Of which: Loans and advances |
- |
- |
- |
| Financial assets at amortized cost |
20.650 |
16.0 |
17.799 |
| Of which: Loans and advances to customers |
18,473 |
11.3 |
16,598 |
| Inter-area positions |
- |
- |
- |
| Tangible assets |
74 |
87.5 |
39 |
| Other assets |
239 |
(5.8) |
254 |
| Total assets/liabilities and equity |
21,686 |
15.1 |
18,834 |
| Financial liabilities held for trading and designated at fair value through profit or loss |
47 |
13.2 |
42 |
| Deposits from central banks and credit institutions |
919 |
(27.7) |
1,271 |
| Deposits from customers |
4,366 |
(10.5) |
4,876 |
| Debt certificates |
622 |
192.3 |
213 |
| Inter-area positions |
14,466 |
26.8 |
11,406 |
| Other liabilities |
420 |
55.7 |
270 |
| Economic capital allocated |
844 |
11.6 |
757 |
| Relevant business indicators |
30-09-19 |
∆% |
31-12-18 |
| Performing loans and advances to customers under management (1) |
18,464 |
11.5 |
16,553 |
| Non-performing loans |
364 |
(15.3) |
430 |
| Customer deposits under management (1) |
4,366 |
(10.5) |
4,876 |
| Off-balance sheet funds (2) |
497 |
28.1 |
388 |
| Risk-weighted assets |
17,612 |
13.8 |
15,476 |
| Efficiency ratio (%) |
62.8 |
|
69.3 |
| NPL ratio (%) |
1.3 |
|
1.7 |
| NPL coverage ratio (%) |
97 |
|
83 |
| Cost of risk (%) |
0.05 |
|
(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 as of September 30, 2019 were:
- Lending activity (performing loans under management) recorded an increase of 11.5% in the first nine months of 2019 (up 10.4% year-on-year), mainly explained by the good performance in Asia.
- Credit risk indicators improved in the first nine months of the year: the NPL ratio closed at 1.3% and the NPL coverage ratio at 97% (1.7% and 83%, respectively at the end of December 2018).
- Customer deposits under management fell by 10.5% in the first nine months of 2019, affected by the negative interest rate environment in Europe.
- Regarding results, good performance of net interest income (up 3.6% year-on-year) and especially of NTI (up 21.4% year-on-year) thanks to the contribution of commercial activity in the Global Markets unit, partially offset by a reduction in net fees and commissions (down 7.6% year-on-year although improved 8.9% in the quarter). Operating expenses showed a decline (down 0.6% year-on-year) due to the continuous management of discretionary spending. The impairment on financial assets line showed a decrease compared to the first nine months of the previous year (down 26.2%), which included specific provisions of some wholesale customers in Europe and Asia. Provisions performance compared to 2018 is affected by higher releases last year, as result of lower loan-loss provisions requirements in Europe. The area's cumulative net attributable profit for the first nine months of 2019 was €103m (up 69.4% year-on-year).
