Spanish Banks’ Yield In Q2’21 Led The Eurozone At 11.49% YoY, While Solvency Was At The Bottom With A CET1 Ratio Of 13.06%

Spanish banks posted €12.779 Bn in 2Q21

The return on equity (RoE) of Spanish banks in the second quarter of 2021 was the highest in the euro area at 11.49% annualised, according to data from the European Central Bank.

So the profitability of Spanish banks was well above the average of 6.92% annualised for the aggregate of the 114 banks directly supervised by the ECB, of which eleven are Spanish institutions.

At the opposite end of the spectrum to Spanish lenders, Greek banks recorded an annualised RoE of -34.28%.

The banks supervised by the ECB achieved an aggregate profit of 54.786 billion euros in the second quarter, compared with 28.171 billion in the first three months of 2021 and well above the scant 98.5 million euros accumulated in the second quarter of 2020.

The eleven French banks directly supervised by the ECB posted the highest aggregate net profit between April and June, at 18.743 billion euros, ahead of the 12.779 billion posted by Spanish banks.

Only Greek banks posted aggregate losses in the quarter, with a negative result of 4.019 billion between the four Greek banks supervised directly by the ECB.

On the other hand, in terms of solvency, Spanish banks are at the bottom of the euro zone countries as far as capital goes, with a CET1 ratio of 13.06%, only slightly higher than Greece’s 12.66%.

In the euro area as a whole, the CET1 solvency ratio stood at 15.6%, compared with 15.49% in the first three months of 2021.

In terms of asset quality, the aggregate volume of non-performing loans (NPLs) declined in the second quarter to €422 billion euros from €455 billion in the first quarter.

The NPL ratio stood at 2.32%, down from 2.54% in the previous quarter, with Greece as the country with the worst ratio, at 14.8%, and Luxembourg with the lowest ratio, limited to 0.68%. In the case of Spanish banks this ratio was 3.13%.

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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.