The year-on-year comparison of earnings in the area is strongly influenced by the following factors:
- Elimination of the “floor clauses” in residential mortgage loans in May 2013, which were in place throughout the whole of the first quarter of last year.
- The capital gains generated in March 2013 by the reinsurance operation on the individual life and accident insurance portfolio.
Net interest income in the first quarter of 2014 declined by 13.0% year-on-year, influenced by the effect of the “floor clauses”. Excluding this impact, the figure is positive, despite the reduction in the stock of loans and an environment of low interest rates, thanks to good price management in both deposits and lending, which is leading to a positive widening of customer spreads in recent months.
Good performance of income from fees and commissions, largely due to the growing revenue from asset management, credit cards and wholesale banking operations.
There was a significant contribution from NTI as a result of a positive performance by the Global Markets unit and good management of the structural risks on the balance sheet.
All the above, combined with the better trend in the other income/expenses heading, has led to a year-on-year rise of 5.5% in gross income.
Operating expenses continue to be held in check, with a reduction of €61m on the figure for the same period last year, amounting to a year-on-year saving of 7.9%.
This performance of revenue and expenses has improved the efficiency ratio and increased the operating income of the area in comparison with the data for the same period last year.
A decline in impairment losses on financial assets, which are at levels clearly below those of the quarterly average in the previous year.
Overall, net attributable profit of €386m was generated in the first quarter of 2014, 33.3% below the figure in the same period of 2013, but 178.4% up excluding the one-off figure from the reinsurance operation mentioned above.
