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Sunday, February 5, 2023

Bank profitability remained at record highs in the first quarter, according to the Bank of Spain


Equity and bad debt ratios fell slightly


The annualized return on equity of Spanish financial institutions remained at historical highs, standing at 10.56% at the end of the first quarter of the year, excluding the impact of the goodwill recognition in the first quarter of 2021 as a result of the merger process between CaixaBank and Bankia, which represents a “very high ” Generated yield value.

This is reflected in the supervisory statistics of credit institutions for the first quarter of 2022, published this Wednesday by the Banco de España.

The publication also highlights that the bad loan rate for all credit institutions slightly decreased compared to the previous quarter and stood at 2.84%. By type of institution, the doubt rate for significant institutions decreased to 2.95% and that for less significant institutions remained relatively stable at 2.00%.

On the other hand, the capital ratios of all banks fell slightly in the first quarter of 2022: the ordinary capital ratio (CET1) was 13.36%; the core capital ratio at 14.92% and the total capital ratio at 17.08%.

By type of company, the total capital ratio of the significant companies was 16.75% and that of the less significant companies was 22.65%.

The cost of risk increased to 1.09% in the first quarter of 2022 from 0.97% in the previous quarter.

The aggregate leverage ratio declined, standing at 5.75% between January and March, compared to 5.81% in the first quarter of 2021), a decline that was a consequence of the increase in overall exposure, the Bank of Spain said.

In this sense, the regulator states that the level of this risk will increase in the second quarter, as the European Central Bank did not extend beyond March 2022 the supervisory measure that allowed credit institutions to exclude leveraged exposures to central currencies from their quotas banks.

“Therefore, from April 1, 2022, companies will again include exposures to central banks in the leverage ratio, resulting in a reduction of the same,” he adds.

The loan-to-deposit ratio remained stable, standing at 100.66% in the first quarter of 2022, compared with 100.01% in the previous quarter, remaining at the lowest level since the first quarter of 2017.


The Banco de España also collects data from major institutions on total loans and loans subject to measures related to Covid-19. In this regard, it should be noted that the volume of these loans amounted to 113,800 million euros in the first quarter, compared to 116,200 million euros in the previous quarter.

This decrease was largely due to new loans and loans subject to public guarantee programs related to the Covid-19 crisis, which decreased to an amount of 102.1 million euros, representing 4.48% of the total loans advances of these Company of 103,600 million euros in the fourth quarter of 2021.

For the less significant companies, the amount of new loans and loans subject to public guarantee programs related to the COVID-19 crisis amounted to 5,600 million euros, which is 4.52% of the total loans and loans of these companies.


Source europapress.es

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