CECA Entities Report an Attributed Result of €1.991 Billion in the First Half of 2017, 10.5% Higher Than the Same Period in 2016
The ROE for the first half stands at 7%, half a percentage point above that recorded in the same period of 2016.
The improvement in profitability is supported by an increase in recurrent income, with year-on-year growth in the interest margin and net commissions in the semester.
The sector has strengthened its solvency, with the CET1 ratio reaching 13.4% in June 2017, 20 basis points higher than a year ago.
The interest margin shows a growth of 2.6% in the first semester compared to the same period in 2016, due to a more intense reduction in interest expenses (-28%) compared to interest income (-8%), and now represents 1.12% of the balance sheet, 4 basis points more than in June 2016. Net commission income grew by 13.5% compared to 2016, mainly driven by income from the marketing and management of off-balance sheet products.
Operating expenses increased by 7.9% year-on-year, due to the incorporation of BPI (following its integration into CaixaBank) as well as other costs associated with restructuring processes. Discounting these impacts, operating expenses would have remained practically stable compared to the first half of 2016.
The provision allocation accumulated in the first half amounted to €2.054 billion, representing a 14% increase compared to the same period in 2016. Losses from impairment of financial assets continue to decline (-3%), in line with the improvement in the credit quality of entities in the sector. However, this decline is offset by an increase in provisions to cover potential future contingencies (47%).
Regarding activity, the retail credit balance moderated its decline to 2.5% in June and deposits remained stable compared to June 2016. The new credit granted in the first six months of the year continued to grow compared to the first half of 2016, both in SMEs (13%) and for consumption (16%) and housing (15%). The default rate of credit in the sector reduced in June to 7.7%, representing a decrease of 1.2 percentage points compared to June 2016, and is below the rate for the entire financial system (8.5%).
