The profitability of banks operating in Spain increased in the past March to a record of 14.66% due to the recognition of the fund of the trade in the merger of CaixaBank and Bankia which, if excluded, leaves still a ratio of 8.25%, which supposes levels similar to the profitability prepandemics, although “below the estimated cost of capital habitually”.
This is how the Bank of Spain details it in its Supervisory Statistics published this Tuesday and whose historical series starts in the fiscal year 2015. Since then, profitability measured on equity (ROE) The highest recorded by the sector was in 2018, with 9.53%, and the worst record was suffered during the second quarter of 2020 coinciding with the Covid, when it sank to -7.46% due to the millionaire losses wedged in when making bulky provisions.
From that minimum, the ratio eased its fall to -2.51% and -3.15% in the third and fourth quarter of last year, to now bounce a 14.66% with the merger of CaixaBank and Bankia or more than 8% without its effect accountant.
The improvement is explained when the net result amounted to 9,274 million euros during the first quarter of the year, while the item of impairments and provisions, it subtracted 5,705 million euros. Of the amount total, 8,732 million correspond to benefits of the entities significant, 542 million to other credit institutions and 276 million to other less significant and the ICO.
Along with the improvement in profitability, the sector raised its ratio of liquidity coverage and leverage lowered, maintained capital and saw the NPL ratio worsen for the first time.
The NPL ratio of all credit institutions increased for the first time since the third quarter of 2015 began to be published this information, standing at 2.99% in the first quarter 2021, up from 2.83% last December.
Its progress is due to the entry into force in January of the Guidelines of the European Banking Authority on the application of default. For type of entities, the ratio stood at 3.09% in entities significant and 2.05% in the least significant.
The capital ratio at the ordinary level or CET1 of the sector was in turn at 13.40% compared to 13.50% in December, the ratio of Tier 1 at 14.88%, and the total capital ratio at 17.06%. The latter was 17.01% three months earlier and has grown by 130 basis points in one year.
By entities, the smallest continue to be the largest mattresses accumulate with a total capital of 22.77% compared to 16.69% observed in significant entities or directly supervised by the Bank Central European (ECB).
In terms of liquidity, the coverage ratio of all entities credit increased and stood at 204.83% at the end of March, being 196.75% in the most significant entities and 315.46% in the less significant.