The entities associated with CECA increase their results by 29.2% in the third quarter, reaching 3.542 billion

The significant decrease in real estate write-downs, along with the strength of recurring income (interest margin and commissions) and the containment of operating expenses, have been the main
drivers of the increase in results

The entities associated with CECA have achieved a total attributed result of 3.542 billion euros in the first nine months of 2018, 29.2% more than in the same period of 2017.

The entities maintain a positive trend in the interest margin. Continuous management of financial costs allows for a reduction in interest expenses (11.6%) greater than the decline in interest income (-2.8%), whose decrease is contained thanks to the improvement in credit profitability. Net commission income advances by 3.3% compared to 2017, driven mainly by the marketing and management of investment and pension funds.

The improvement in recurring income and the good performance of income from the equity portfolio contribute to the increase in gross margin, which grows by 1.2% compared to the previous year.

Operating expenses are reduced by 1% in line with the effort to rationalize and contain costs, especially due to the moderation of personnel expenses (-1.8%).

Notably, there has been a significant reduction in losses from asset impairments (-69%) and “provisions” (-52%) compared to the same period last year. In this regard, credit quality indicators continue their normalization process. So far this year, there has been a significant drop in doubtful credits (-14% since December 2017), which has allowed for the reduction of the sector’s delinquency ratio to
6.2% in September 2018, while the coverage ratio stands at 54.7%.

The positive evolution of recurring income, together with the intense reduction of write-downs and provisions, has allowed for an increase in the result before taxes of the entities associated with CECA to 4.786 billion in September, 49.4% more than in the same period of the previous year.

The entities associated with CECA improve their efficiency ratio by 1.2 p.p. in the last twelve months, bringing it to 53.5% in September, as well as the return on equity, which rises by 1.8 p.p. compared to September of the previous year, reaching 8.2%.