The economic and commercial recovery, together with lower provisions compared to the previous year, when extraordinary provisions were made to cope with the impact of COVID-19, have allowed profitability in 2021 to recover to the levels prior to the health crisis.
Against a backdrop of economic recovery, CECA sector entities have increased their attributable profit in 2021 to €7.079 billion. Excluding the extraordinary impact of the merger processes, the result is €3.336 billion.
CECA's member entities as a whole obtained attributable profit of €7.079 billion, compared with €2.129 billion the previous year. The 2021 result takes into account the extraordinary impact of mergers in the sector, without which it is €3.336 billion.
Vaccination and the onset of the economic recovery led to lower impairment losses on financial assets during the year (€2.557 billion less than in 2020), which favoured an improvement in results and raised return on equity (ROE excluding extraordinary adjustments) to 5.7% in 2021, compared to 3.5% in the previous year, recovering the ROE to the levels prior to the health crisis.
In terms of revenues, net interest income declined 5.3% as a result of the Euribor continuing at record low levels, as well as due to changes in the structure of the portfolio, with a greater weight of ICO loans and lower revenues from consumer loans and fixed-income.
The upturn in business activity has led to an increase in fee income (10.5%), as well as in the results of investees (17.2%) and in dividend income (19.8%), although this improvement did not offset the decline in net interest income, in the result on financial operations and operating income.
On the expenditure side, the restructuring efforts undertaken by the institutions led to a slight reduction in operating expenses (-1.9%), excluding the extraordinary costs associated to the merger processes. The efficiency ratio (excluding extraordinary expenses) was slightly higher than in 2020 at 58.5%, due to the decline in the gross margin.
Despite the cyclical deterioration in the economy as a result of the pandemic, doubtful loans remained contained, standing at 3.8% in December for the sector as a whole, 0.4 p.p. lower than the rate recorded at the end of 2019 and 0.4 p.p. lower than that of deposit institutions as a whole.
Furthermore, with regard to solvency, the sector's banks reached a CET1 ratio of 13.4% in December 2021, a level similar to that prior to the COVID-19 crisis and comfortably exceeding the minimum capital requirements demanded by the European Central Bank (ECB).