The entities associated with CECA increase their results by 29.8% in 2018, reaching 3.828 million

The significant decrease in real estate write-downs, the positive evolution 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 3.828 million euros in the 2018 financial year, representing an increase of 29.8% compared to 2017.

The interest margin has maintained a positive trend, growing by 1.2% compared to 2017, due to a more intense decline in interest expenses (-11.1%) compared to interest income (-2.1%). Similarly, net commissions increased by 3.4% during the year.

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.

With regard to expenses, the reduction in operating expenses by 4.7% stands out, in line with the cost containment efforts by the entities, which, together with the increase in gross margin, has allowed for an improvement in the sector’s efficiency level by 3.5 percentage points, bringing the efficiency ratio to 56.1% at the end of the year.

Furthermore, the improvement in asset quality indicators and lower restructuring expenses compared to the previous year have halved the amount allocated to write-downs and provisions in 2018.

The lower write-downs are associated with a significant reduction in non-performing loans throughout 2018 (-22% since December 2017), which has allowed the sector’s non-performing loan ratio to decrease to 5.7% in December 2018, 1.4 percentage points lower than at the end of the previous financial year and slightly below the average of the entire financial system (5.8%).

The positive evolution of recurring income, along with the intense reduction of write-downs and provisions, has allowed the result before taxes for the entities associated with CECA to rise to 5.124 million in December, 53.1% more than in the same period of the previous year.

Additionally, the entities associated with CECA improve their return on equity (ROE), which rises by 1.4 percentage points compared to December of the previous year, reaching 6.6%.