Rest of Eurasia

Highlights

  • Good performance of lending activity.
  • Improved risk indicators.
  • Increased recurring income resulting from positive evolution of the transactional and investment banking and good performance of NTI.
  • Reduction of operating expenses.

Financial statements and relevant business indicators (Millions of euros and percentage)

Income statement 1H20 ∆% 1H19
Net interest income 102 21.0 85
Net fees and commissions 83 19.6 69
Net trading income 78 29.7 60
Other operating income and expenses 5 (14.8) 6
Gross income 268 22.1 220
Operating expenses (137) (3.4) (142)
Personnel expenses (65) (6.0) (69)
Other administrative expenses (63) (1.4) (64)
Depreciation (9) 2.8 (9)
Operating income 131 68.2 78
Impaiment on financial assets not measured at fair value through profit or loss (34) 220.5 (11)
Provisions or reversal of provisions and other results (8) n.s. 1
Profit/(loss) before tax 89 30.1 69
Income tax (23) 72.1 (13)
Profit/(loss) for the year 66 20.0 55
Non-controlling interests - - -
Net attributable profit 66 20.0 55
Balance sheets 30-06-20 ∆% 31-12-19
Cash, cash balances at central banks and other demand deposits 310 25.3 247
Financial assets designated at fair value 500 4.6 477
Of which: Loans and advances - - -
Financial assets at amortized cost 25,688 15.5 22,233
Of which: Loans and advances to customers 22,524 14.5 19,669
Inter-area positions - - -
Tangible assets 69 (3.8) 72
Other assets 239 5.1 228
Total assets/liabilities and equity 26,805 15.3 23,257
Financial liabilities held for trading and designated at fair value through profit or loss 47 (17.3) 57
Deposits from central banks and credit institutions 1,054 1.5 1,039
Deposits from customers 4,567 (3.0) 4,708
Debt certificates 380 (54.6) 838
Inter-area positions 19,423 26.5 15,351
Other liabilities 394 (1.3) 399
Economic capital allocated 940 8.8 864
Relevant business indicators 30-06-20 ∆% 31-12-19
Performing loans and advances to customers under management (1) 22,587 14.9 19,663
Non-performing loans 254 (27.4) 350
Customer deposits under management (1) 4,567 (3.0) 4,708
Off-balance sheet funds (2) 518 3.5 500
Risk-weighted assets 20,247 12.6 17,989
Efficiency ratio (%) 51.1 64.6
NPL ratio (%) 0.8 1.2
NPL coverage ratio (%) 126 98
Cost of risk (%) 0,32 0,02

(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 in the first half of 2020 were:

  • Lending activity (performing loans under management) grew by 14.9% during the first half of the year, due to a greater drawdown of loans by customers to face the situation generated by COVID-19 from a more comfortable liquidity position.
  • Asset quality indicators improved compared to the end of 2019: the NPL ratio and NPL coverage ratio closed at 0.8% and 126%, respectively, as of June 30, 2020.
  • Customer deposits under management fell by 3.0%.
  • In terms of results, the most recurring revenues increased 20.4% year-on-year due to the positive performance of both net interest income (up 21.1% year-on-year) and net fees and commissions (up 19.6% year-on-year), supported by the CIB activity.
  • The NTI line increased (up 29.7% year-on-year) due to the good performance of customer activity and favorable management of market volatility.
  • Reduction of operating expenses (down 3.4% year-on-year).
  • The impairment on financial assets line increased, mainly as a result of the impairment of a specific customer.
  • As a result, the area's net attributable profit in the first half of 2020 was €66m (up 20.0% year-on-year).