Rest of Eurasia
Highlights
- Activity mainly affected by the loans amortizations made during the second half of the year.
- Contained 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 | 2020 | ∆% | 2019 |
|---|---|---|---|
| Net interest income | 214 | 22.4 | 175 |
| Net fees and commissions | 150 | 8.2 | 139 |
| Net trading income | 137 | 4.4 | 131 |
| Other operating income and expenses | 9 | (4.8) | 9 |
| Gross income | 510 | 12.3 | 454 |
| Operating expenses | (285) | (2.7) | (293) |
| Personnel expenses | (135) | (6.3) | (144) |
| Other administrative expenses | (133) | 1.6 | (131) |
| Depreciation | (17) | (5.5) | (18) |
| Operating income | 225 | 39.8 | 161 |
| Impaiment on financial assets not measured at fair value through profit or loss | (38) | n.s. | (4) |
| Provisions or reversal of provisions and other results | (2) | n.s. | 6 |
| Profit/(loss) before tax | 184 | 13.3 | 163 |
| Income tax | (48) | 33.3 | (36) |
| Profit/(loss) for the year | 137 | 7.6 | 127 |
| Non-controlling interests | - | - | - |
| Net attributable profit | 137 | 7.6 | 127 |
| Balance sheets | 31-12-20 | ∆% | 31-12-19 |
|---|---|---|---|
| Cash, cash balances at central banks and other demand deposits | 285 | 15.3 | 247 |
| Financial assets designated at fair value | 492 | 3.0 | 477 |
| Of which: Loans and advances | - | - | - |
| Financial assets at amortized cost | 21,839 | (1.8) | 22,233 |
| Of which: Loans and advances to customers | 18,908 | (3.9) | 19,669 |
| Inter-area positions | - | - | - |
| Tangible assets | 65 | (9.5) | 72 |
| Other assets | 200 | (11.9) | 228 |
| Total assets/liabilities and equity | 22,881 | (1.6) | 23,257 |
| Financial liabilities held for trading and designated at fair value through profit or loss | 46 | (19.4) | 57 |
| Deposits from central banks and credit institutions | 858 | (17.4) | 1,039 |
| Deposits from customers | 4,578 | (2.8) | 4,708 |
| Debt certificates | 704 | (16.0) | 838 |
| Inter-area positions | 15,398 | 0.3 | 15,351 |
| Other liabilities | 419 | 4.9 | 399 |
| Economic capital allocated | 879 | 1.7 | 864 |
| Relevant business indicators | 31-12-20 | ∆% | 31-12-19 |
|---|---|---|---|
| Performing loans and advances to customers under management (1) | 18,906 | (3.8) | 19,663 |
| Non-performing loans | 296 | (15.3) | 350 |
| Customer deposits under management (1) | 4,578 | (2.8) | 4,708 |
| Off-balance sheet funds (2) | 569 | 13.8 | 500 |
| Risk-weighted assets | 18,249 | 1.4 | 17,989 |
| Efficiency ratio (%) | 56.0 | 64.6 | |
| NPL ratio (%) | 1.1 | 1.2 | |
| NPL coverage ratio (%) | 100 | 98 | |
| Cost of risk (%) | 0.18 | 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 2020 were:
- Lending activity (performing loans under management) decreased in the last quarter of the year, mainly in the commercial segment in Europe (excluding Spain), which together with that of the previous quarter caused the 2020 balances in this business area to close below those recorded in the previous year (down 3.8%). The above is explained by both the amortizations made during the second half of the year, 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 in the third quarter of 2020, as a funding alternative.
- Credit risk indicators remained stable compared to the end of 2019: the NPL ratio and NPL coverage ratio closed at 1.1% and 100%, respectively, as of December 31, 2020.
- Customer deposits under management fell by 2.8%, due to the decrease in time deposits.
- In terms of results, double-digit increase of 16.1% year-on-year in the most recurring revenues due to the positive performance of both net interest income (up 22.4% year-on-year) and net fees and commissions (up 8.2% year-on-year), supported by CIB activity.
- The NTI line increased (up 4.4% year-on-year) due to the good performance of customer activity and favorable management of market volatility.
- Reduction of operating expenses (down 2.7% year-on-year).
- The impairment on financial assets registered a release of €10m in the last quarter of the year and closed the year at €-38m, well above the €-4m recorded 12 months earlier, mainly as a consequence of the deterioration of specific customers in the wholesale portfolio. As a result, the cumulative cost of risk of the area at the end of the year stood at 0.18%.
- As a result, the area's cumulative net attributable profit at the end of December 2020 was €137m (up 7.6% year-on-year).