Rest of Eurasia
Highlights
- Moderation of lending activity growth.
- Improved risk indicators.
- Increased recurring income and good performance of NTI.
- Reduction of operating expenses.
Financial statements and relevant business indicators (Millions of euros and percentage)
| Income statement | Jan.-Sep. 20 | ∆% | Jan.-Sep. 19 |
|---|---|---|---|
| Net interest income | 159 | 21.9 | 130 |
| Net fees and commissions | 117 | 10.8 | 105 |
| Net trading income | 105 | 11.9 | 94 |
| Other operating income and expenses | 7 | (17.7) | 9 |
| Gross income | 388 | 14.6 | 338 |
| Operating expenses | (204) | (4.0) | (213) |
| Personnel expenses | (92) | (10.7) | (103) |
| Other administrative expenses | (99) | 2.7 | (96) |
| Depreciation | (13) | (1.5) | (13) |
| Operating income | 184 | 46.1 | 126 |
| Impaiment on financial assets not measured at fair value through profit or loss | (48) | n.s. | (7) |
| Provisions or reversal of provisions and other results | (8) | n.s. | 10 |
| Profit/(loss) before tax | 128 | (1.2) | 129 |
| Income tax | (31) | 17.2 | (27) |
| Profit/(loss) for the year | 96 | (5.9) | 103 |
| Non-controlling interests | - | - | - |
| Net attributable profit | 96 | (5.9) | 103 |
| Balance sheets | 30-09-20 | ∆% | 31-12-19 |
|---|---|---|---|
| Cash, cash balances at central banks and other demand deposits | 306 | 23.9 | 247 |
| Financial assets designated at fair value | 474 | (0.7) | 477 |
| Of which: Loans and advances | - | - | - |
| Financial assets at amortized cost | 23,813 | 7.1 | 22,233 |
| Of which: Loans and advances to customers | 20,938 | 6.4 | 19,669 |
| Inter-area positions | - | - | - |
| Tangible assets | 66 | (8.0) | 72 |
| Other assets | 229 | 0.8 | 228 |
| Total assets/liabilities and equity | 24,888 | 7.0 | 23,257 |
| Financial liabilities held for trading and designated at fair value through profit or loss | 43 | (24.2) | 57 |
| Deposits from central banks and credit institutions | 857 | (17.5) | 1,039 |
| Deposits from customers | 4,597 | (2.3) | 4,708 |
| Debt certificates | 372 | (55.6) | 838 |
| Inter-area positions | 17,706 | 15.3 | 15,351 |
| Other liabilities | 405 | 1.5 | 399 |
| Economic capital allocated | 907 | 5.0 | 864 |
| Relevant business indicators | 30-09-20 | ∆% | 31-12-19 |
|---|---|---|---|
| Performing loans and advances to customers under management (1) | 20,996 | 6.8 | 19,663 |
| Non-performing loans | 263 | (24.9) | 350 |
| Customer deposits under management (1) | 4,597 | (2.3) | 4,708 |
| Off-balance sheet funds (2) | 529 | 5.8 | 500 |
| Risk-weighted assets | 18,855 | 4.8 | 17,989 |
| Efficiency ratio (%) | 52,6 | 64.6 | |
| NPL ratio (%) | 0.9 | 1.2 | |
| NPL coverage ratio (%) | 124 | 98 | |
| Cost of risk (%) | 0.30 | 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 during the first nine months of 2020 were:
- Lending activity (performing loans under management) registered a quarterly fall, mainly in the commercial segment in Europe (excluding Spain) and thus moderated the growth registered between January and September 2020 to 6.8%. The above is explained by both the amortizations made between July and September, as customers did not have to use all the liquidity initially available to cope with the situation generated by COVID-19, and by the reopening of the wholesale funding markets as a funding alternative.
- Credit risk indicators improved compared to the end of 2019: the NPL ratio and NPL coverage ratio closed at 0.9% and 124%, respectively, as of September 30, 2020.
- Customer deposits under management fell by 2.3%, due to the decrease in time deposits.
- In terms of results, the most recurring revenues increased by 16.9% year-on-year due to the positive performance of both net interest income (up 21.9% year-on-year) and net fees and commissions (up 10.8% year-on-year), supported by CIB activity.
- The NTI line increased (up 11.9% year-on-year) due to the good performance of customer activity and favorable management of market volatility.
- Reduction of operating expenses (down 4.0% year-on-year).
- The impairment on financial assets line closed at €-48m, well above the €-7m recorded 12 months earlier, mainly as a consequence of the deterioration of specific customers in the commercial portfolio. As a result, the cumulative cost of risk of the area at the end of September stood at 0.30%.
- As a result, the area's cumulative net attributable profit at the end of September 2020 was €96m (down 5.9% year-on-year).