BANCO POPULAR ESPANOL Quarterly Report
The application of IFRIC 21 involved in December 2014 adjusting the calculation of the contribution to the Deposit Guarantee Fund both for prior years and for 2014, following the criterion of determining that levies be recognised when the payment obligation for them arises.
Following is the 2014 restated income statement for the first nine months, for comparison with the same period of 2015.
Financial asset & liability transactions & other income 747,943 830,595
Gross operating income 3,020,498 3,103,150
Attributed net profit 231,058 302,060
Following is the restated 2014 balance sheet at 3Q end, for comparison with the same period of 2015.
Total assets 159,992,841 160,028,325
Total liabilities 147,217,643 147,333,148
Total net asset value 12,775,198 12,695,177
(Amounts in € thousand) | 30.09.14 | 30.09.15 | Var. % |
Business Volume | |||
Total assets managed | 176,940,061 | 180,597,575 | 2.1 |
On-balance sheet total assets | 160,028,325 | 160,373,706 | 0.2 |
Own funds | 12,761,039 | 12,925,372 | 1.3 |
Customer deposits | 86,853,320 | 87,195,724 | 0.4 |
Lending to customers (gross) | 109,497,181 | 107,821,872 | (1.5) |
solVency | |||
CET 1 ratio (%) | 11.06 | 12.65 | |
Tier 1 ratio (%) | 11.06 | 12.65 | |
Total capital ratio (%) | 11.39 | 13.24 | |
Fully loaded Basel III Leverage ratio (%) 1 | 5.75 | 5.96 | |
Risk mAnAgement | |||
Total risks | 148,319,799 | 142,532,195 | (3.9) |
Non-performing loans | 20,541,899 | 18,706,751 | (8.9) |
Allowances for credit losses | 9,026,181 | 7,788,426 | (13.7) |
% non-performing ratio | 13.85 | 13.12 | |
% coverage of non-performing loans and written-off loans | 54.75 | 54.61 | |
% coverage of non-performing loans | 43.94 | 41.63 | |
% coverage with guarantees 2 | 102.87 | 95.93 | |
eARnings | |||
Net interest income | 1,760,453 | 1,686,162 | (4.2) |
Gross operating income | 3,103,150 | 2,672,700 | (13.9) |
Profit before provisions | 1,704,439 | 1,393,872 | (18.2) |
Profit before tax | 343,907 | 373,681 | 8.7 |
Consolidated profit for the year | 301,705 | 277,609 | (8.0) |
Net profit attributed to the Group | 302,060 | 278,036 | (8.0) |
net RetuRn And efficiency | |||
Average total assets | 152,778,948 | 159,158,742 | 4.2 |
Average risk-weighted assets (RWA) | 83,667,653 | 79,494,954 | (5.0) |
Average total equity | 12,487,877 | 12,746,547 | 2.1 |
ROA (%) | 0.26 | 0.23 | |
RORWA (%) | 0.48 | 0.47 | |
ROE (%) | 3.22 | 2.91 | |
Operating efficiency (%) | 41.48 | 44.00 | |
PeR shARe dAtA | |||
Final number of shares fully diluted (thousands) 3 | 2,136,146 | 2,155,085 | 0.9 |
Average number of shares (thousands) 3 | 2,106,808 | 2,149,094 | 2.0 |
Adjusted share closing market price (€) | 4.85 | 3.26 | (32.8) |
Market capitalization 4 | 10,353,900 | 7,023,422 | (32.2) |
Book value per share diluted (€) | 5.98 | 6.00 | 0.3 |
Net earnings per share (€) 3,5 | 0.144 | 0.130 | (10.2) |
Price/Book value | 0.81 | 0.54 | |
Price/Earnings (annualized) | 25.20 | 18.87 | |
otheR dAtA | |||
Shareholders | 272,953 | 259,058 | (5.1) |
Employees | 15,520 | 15,019 | (3.2) |
Spain: | 13,668 | 13,347 | (2.3) |
Men | 8,601 | 8,261 | (4.0) |
Women | 5,067 | 5,086 | 0.4 |
Abroad: | 1,852 | 1,672 | (9.7) |
Men | 1,120 | 974 | (13.0) |
Women | 732 | 698 | (4.6) |
Branches: | 2,152 | 2,121 | (1.4) |
Spain | 1,951 | 1,927 | (1.2) |
Abroad | 201 | 194 | (3.5) |
ATMs | 2,696 | 2,551 | (5.4) |
Fully-loaded Basel III leverage ratio under CRR proforma.
Risk coverage ratio including the value of the guarantees after applying the discounts defined in Annex IX of Bank of Spain Circular 4/2004.
Including 35,681 thousand notes mandatorily convertible in November 2015.
Including the mandatorily convertible notes.
Calculated on average number of diluted shares.
For the purposes of comparison, the year 2014 figures have been restated by application of IFRIC 21.
The consolidated financial statements as of 30 September 2015 included herein have not been audited albeit are being prepared in accordance with the accounting principles and methods esta- blished by the International Financial Reporting Standards as adopted by the European Union (IFRS-EU), and are consistent with those used in the preparation of the audited financial statements in the 2014 Annual Report.
In the third quarter of 2015 the Spanish economy continued to show clear symptoms of recovery, albeit at a slightly lower rate than in the first half of the year. Preliminary Bank of Spain data placed the third quarter increase in GDP at 0.8% quarter on quarter (3.4% year on year). As was evident in the preceding quarter, the expansion of activity was due mainly to the improvement in private domestic demand, although early indicators suggest a slowdown in expenditure. Moreover, business investment again showed a positive trend, driven by an increase in the supply of credit and higher use of production capacity. In contrast, the contribution of net external demand worsened in comparison with the second quarter, because imports grew more than exports.
Also noteworthy was the 2.49 percentage points fall in the inter-annual unemployment rate, which stood at 21.18% at September 2015 (EPA).
Since the second quarter, growth prospects of the world economy have been revised downwards, mainly because of the impact of the slowdown of China in world trade and in raw material prices. Latin America was particularly prejudiced because of the weight of raw material exports in its economy, most notably in the case of Brazil which is in recession. Furthermore the FED has postponed the raising of interest rates, triggering a reaction in the market consensus, which has set back its expectations of a rate increase until 2016. The fall in oil prices interrupted the upward trend of inflation, which decreased in September by 0.9%, although the core index (CPI excluding energy and unprocessed foodstuffs) stood at 0.8% at that date.
In an environment of high market volatility Spain's risk premium improved in the third quarter and at quarter end stood at around 130 basis points, compared to the 153 basis points at the end of June 2015.
The good performance of the Bank's commercial activity was confirmed in the third quarter. The symptoms of recovery of credit and, more specifically, of performing loans, persisted, and cumulative growth of 1% in the first nine months confirmed the change of trend perceived in the first quarter. As has been the case since the beginning of the year, this upturn was based on the strong performance of business activity, especially of SMEs, with which the volume of new business in the period was 24% higher than in the same nine months of 2014.
Also, as regards private individual borrowers, the volume of new business has also been very positive, with year-on-year growth of 9%. In contrast, the cumulative 10.4% decline in credit to developers in 2015 continued the process of reduction of exposure to the property sector.
As was the case in preceding quarters customer funds continued to evolve well and since the beginning of the year have increa- sed by €4,291m. Notable in this strong performance were current accounts, which were up 32% over 4Q 2014. Also, the first nine months of 2015 saw off-balance sheet funds rising by 14%, including a 20% increase in mutual funds.
The Bank's market share in credit was up 17 basis points in the year and stood at 7.60% in August and the share in retail funds was 11 basis points higher in that period at 5.94%.
The volume of non-productive assets continued to decrease for yet another quarter and as was the case in the second quarter the trend accelerated with a decline of €995m in the year to date, of which €503m originated in the third quarter alone.
One of the basic aspects underlying this development was the good performance in the non-performing loans caption. The relevant ratio again decreased and recorded a cumulative loss of 73 basis points year on year to stand at 13.12% at September 2015. The balance of non-performing loans, after the decline of €464m in the second quarter again fell by a further €459m in the third quar- ter, accumulating an overall decrease of €1,835m in the last twelve months. This confirms the management effort applied in this caption, the downward trend which started in 2014 and, of course, the improvement in the economic climate.
|
distributed by
|
