Highlights
- Good performance in lending, especially in Asia.
- Flattish recurring revenue and positive performance of the NTI.
- Controlled growth of operating expenses.
- Improved risk indicators.
Financial statements and relevant business indicators (Millions of euros and percentage)
| Income statement |
2019 |
∆% |
2018 |
| Net interest income |
175 |
(0.0) |
175 |
| Net fees and commissions |
139 |
0.4 |
138 |
| Net trading income |
131 |
29.2 |
101 |
| Other operating income and expenses |
9 |
n.s. |
(0) |
| Gross income |
454 |
9.6 |
414 |
| Operating expenses |
(293) |
2.2 |
(287) |
| Personnel expenses |
(144) |
5.7 |
(136) |
| Other administrative expenses |
(131) |
(9.2) |
(144) |
| Depreciation |
(18) |
194.2 |
(6) |
| Operating income |
161 |
26.1 |
127 |
| Impaiment on financial assets not measured at fair value through profit or loss |
(4) |
n.s. |
24 |
| Provisions or reversal of provisions and other results |
6 |
n.s. |
(3) |
| Profit/(loss) before tax |
163 |
10.0 |
148 |
| Income tax |
(36) |
(31.3) |
(52) |
| Profit/(loss) for the year |
127 |
32.3 |
96 |
| Non-controlling interests |
- |
- |
- |
| Net attributable profit |
127 |
32.3 |
96 |
| Balance sheets |
31-12-19 |
∆% |
31-12-18 |
| Cash. cash balances at central banks and other demand deposits |
247 |
3.8 |
238 |
| Financial assets designated at fair value |
477 |
(5.2) |
504 |
| Of which: Loans and advances |
- |
- |
- |
| Financial assets at amortized cost |
22,224 |
24.9 |
17,799 |
| Of which: Loans and advances to customers |
19,660 |
18.4 |
16,598 |
| Inter-area positions |
- |
- |
- |
| Tangible assets |
72 |
81.2 |
39 |
| Other assets |
228 |
(10.5) |
254 |
| Total assets/liabilities and equity |
23,248 |
23.4 |
18,834 |
| Financial liabilities held for trading and designated at fair value through profit or loss |
57 |
36.7 |
42 |
| Deposits from central banks and credit institutions |
1,039 |
(18.2) |
1,271 |
| Deposits from customers |
4,708 |
(3.5) |
4,876 |
| Debt certificates |
836 |
292.6 |
213 |
| Inter-area positions |
15,336 |
34.5 |
11,406 |
| Other liabilities |
399 |
47.9 |
270 |
| Economic capital allocated |
873 |
15.4 |
757 |
| Relevant business indicators |
31-12-19 |
∆% |
31-12-18 |
| Performing loans and advances to customers under management (1) |
19,654 |
18.7 |
16,553 |
| Non-performing loans |
350 |
(18.7) |
430 |
| Customer deposits under management (1) |
4,708 |
(3.5) |
4,876 |
| Off-balance sheet funds (2) |
500 |
29.1 |
388 |
| Risk-weighted assets |
17,975 |
16.1 |
15,476 |
| Efficiency ratio (%) |
64.6 |
|
69.3 |
| NPL ratio (%) |
1.2 |
|
1.7 |
| NPL coverage ratio (%) |
98 |
|
83 |
| Cost of risk (%) |
0.02 |
|
(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 area's activity and earnings in 2019 were:
- Lending activity (loans and advances to customers) increased 18.7% in 2019, mainly driven by the strong performance in Asia.
- Credit risk indicators compare positively compared to the end of 2018: the non-performing loan ratio improved from 1.7% to 1.2 at the end of 2019 and the NPL coverage ratio increased from 83% to 98%.
- Customer deposits under management fell by 3.5% in 2019, affected by the negative interest rate environment in Europe.
- As regards to earnings, the NTI performed strongly (up 29.2% year-on-year) due to the contribution of commercial activity in the Global Markets area, which compensated for the decreased dynamism of the net interest income and commissions, which remained flat. Continued management of discretionary expenses resulted in controlled growth of operating expenses (up 2.2% year-on-year). The impairment on financial assets compares negatively with the previous year, due to the releases made in 2018 explained by the lower reserve requirement provisions in Europe. As a result, the area's net attributable profit in 2019 was €127m (up 32.3% year-on-year).
