CECA member banks and savings banks achieve a combined attributed result of 2.51 billion euros by June, 26% more than in 2017

Despite the context of low interest rates, the groups affiliated with CECA managed to increase the interest margin by 0.3% compared to the same semester of the previous year.

The improvement in the quality of the credit portfolio continues, and the write-downs of financial assets have recorded a significant reduction of 50.3%

CECA announced today the results of its associated entities for the first half of 2018. Overall, the groups it represents have achieved an attributed result of 2.51 billion euros during the period, 26.1% more than in the first six months of 2017. The growth in recurring income (interest margin and commissions) and the containment of expenses, along with a significant decrease in real estate write-downs, have been the main drivers of the increase in results.

In a context of low rates, the entities have recorded a positive evolution of the interest margin, with an increase of 0.3% year-on-year. Net commission income grew by 2.6% compared to 2017, mainly driven by income from the marketing and management of investment and pension funds.

Income from the equity portfolio has seen a significant increase due to the results of the invested portfolio. In contrast, both the results from financial operations and “other operating income” have decreased their contribution to the result compared to the first half of 2017.

In line with the effort to rationalize and contain costs, entities have reduced their operating expenses by 1.7%, particularly due to the moderation of personnel expenses.

Additionally, the significant reduction in the losses from the impairment of financial assets (50%) and provisions (-63%) compared to the same period last year has allowed for a 37.3% increase in the pre-tax result of CECA entities, reaching 3.261 billion euros.

So far this year, the improvement in credit quality continues. The latest available data shows a significant drop in non-performing loans, allowing a reduction in the sector’s delinquency ratio by 1.4 percentage points since December 2017, reaching 6.4% in June 2018, while the coverage ratio rises to 55.3%.

Finally, the return on equity increases by 1.7 percentage points compared to June of the previous year, reaching 8.8%, due to the improvement in results.