The entities associated with CECA increase their results by 2.1% in 2017
Despite the low interest rate environment, the groups affiliated with CECA managed to raise their net interest margin by 2.7% compared to 2016.
The entities have continued to strengthen their capital adequacy, as reflected by the CET1 ratio of 13.4%, 0.4 points higher than that of 2016.
As a whole, the groups associated with CECA obtained an attributed result of 2,948 million euros in the past financial year, which is 2.1% more than in 2016. These figures reflect the strong commitment of the entities affiliated with CECA to meet the new needs of customers with new services and products aligned with digital trends.
In 2017, it is worth noting the positive trend in the net interest margin, which, in a context of low interest rates, has increased by 2.7%. This growth has been mainly due to the decline in interest expenses, which decreased by 25%.
On the other hand, the entities associated with CECA recorded an increase of 10.7% in net fee income during 2017, largely due to the growth experienced in the marketing and management of investment funds, pension funds, and insurance products, which have attracted savings in search of higher returns.
The increase in the net interest margin and fees has offset the lower results obtained from financial operations and in the equity portfolio, resulting in a gross margin in the vicinity of 17 billion euros, stable compared to the previous year.
Operating expenses experienced an increase of 9.9% in 2017 compared to 2016, driven by integrations in the sector and costs associated with restructuring processes.
As a consequence of the rise in extraordinary operating expenses and the relative stability of the gross margin, the efficiency ratio stands at 59.5% at the end of the year.
Regarding provisions, the same volume of provisions has been allocated to address future contingencies as in the previous year, while provisions for losses on financial assets have increased by 25%. This increase is primarily due to the release of provisions from the credit portfolio that took place in the fourth quarter of 2016 with the entry into force of Annex IX of BDE Circular 4/2016.
As for the credit delinquency rate, it continues its downward trend. As of December 31, 2017, this percentage stood at 7.14%, accumulating a decline of 1.35 percentage points for the financial year and 5.7 percentage points since the end of 2013.
Finally, the entities in the CECA sector have continued to strengthen their solvency, increasing average equity by 2.7% throughout 2017. This brought the CET1 ratio for the sector to 13.4% at the end of the financial year, which is 0.4 percentage points above the ratio recorded at the end of the previous year.
Ultimately, the return on equity (ROE) for the sector stood at 5.17% in 2017, 3 basis points lower than in 2016, due to the fact that the increase in average equity has been more pronounced (2.7%) than the attributed result (2.1%).
