Spanish banks’ profitability rises to 11.92% in 3Q23, now at all-time high, says Bank of Spain

Spain's banking sectorBank of Spain

CdM | Spanish banks achieved an annualised return on equity of 12.3% in the third quarter of 2023, compared to 11.92% in the previous quarter and 10.25% in the same quarter of 2022, according to supervisory statistics on credit institutions published on Friday by the Bank of Spain, and reported by Europa Press.

This profitability figure is still far from the 14.88% recorded in the first quarter of 2021, although at that time the Bank of Spain indicated that the figure was affected by the merger between CaixaBank and Bankia. Excluding the effect of the merger, the yield would stand at 8.25%, making the figure for the third quarter of 2023 the highest since the series offered by the Bank of Spain, which begins in 2015.

On the other hand, the capital ratios of all credit institutions remained relatively stable in the third quarter of 2023: the ordinary tier 1 capital ratio (CET1) stood at 13.07%, the Tier 1 ratio at 14.57% and the total capital ratio at 16.87%. However, the Bank of Spain points out that, compared with the same period of the previous year, all three capital ratios increased.
As regards asset quality, the statistics show that the doubtful loans ratio practically stabilised, standing at 3.16% in the third quarter, compared with 3.12% in the previous quarter. On a year-on-year basis, it declined by four basis points.

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