Banks: Spanish banks top the European “rankings” in terms of profitability.

Banks: Spanish banks top the European "rankings" in terms of profitability.
Christine Lagarde, President of the European Central Bank.Reuters

The European Central Bank (ECB) released a report on Thursday smiling managers of the Spanish banking system. For the first time in at least two years, Spanish banks’ equity (ROE) returns Classification Among euro-zone firms, it rose 3.79% in March. This rate is the second best in the European Union (EU), with only 4.43% for Romanian banks. Spanish firms averaged 1.83% above the euro area and 1.87% above the 27th.

After improving lightning speed in the first three months of 2021, the Spanish bank fell four consecutive negative quarters. This rate means a return to the pre-pandemic level starting in March 2019. The data underscores the strong growth of three major institutions, Santander, BBVA and Kyxbank, which accounted for the first two losses in 2020. The central bank argues that the European Union will withdraw the dividend veto from October.

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Unlike Spanish banks, Greek banks reported 0.26% return on equity. Polish and Irish firms accounted for less than 1% of earnings from equities of 0.83% and 0.89%, respectively.

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The other side of the coin is negative. In terms of solvency, Spanish banks are below the EU in terms of capital, with a CET ratio of 1 (which is not the most sought after, as it is not so called). Fully loaded) 13.13%, compared to 13.23% in the last quarter of 2020. Across the euro area, the CET1 solvency ratio was 15.43%, while the EU average was 15.68%. This low level of capital allows the measured ROE (return on equity) to be the highest.

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A recent stress test by the European Banking Authority (EBA) also reflected a decline in solvency, with Santander, BBVA and Sabadell appearing among banks with fewer capital reserves to deal with a major crisis.

The European Central Bank has also given a European credit rating to the fixed rate. The share of Spanish firms last March was 3.6%, higher than the average of the European Union (2.5%) and Eurozone banks (2.55%). They are in the leading group of large countries behind Italy with a variance rate of 4.36%. The fixed rate in Ireland is 4.52%. The situation is different in Greece, where the default rate is 26% and Cyprus is 11%. Both countries are still experiencing the banking crisis of 2008. Croatia follows the default rate of 10%. Bulgaria with 9.35%; Poland 7.6%.

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