Other information: Corporate & Investment Banking
Highlights
- Increase in lending activity
- Excellent performance of NTI and favorable evolution of recurring income
- Efficiency improvement
- Year-on-year increase in net attributable profit
BUSINESS ACTIVITY (1)
(VARIATION AT CONSTANT EXCHANGE RATES COMPARED TO 31-12-22)
(1) Excluding repos.
GROSS INCOME / AVERAGE TOTAL ASSETS
(PERCENTAGE AT CONSTANT EXCHANGE RATES)
OPERATING INCOME
(MILLIONS OF EUROS AT CONSTANT EXCHANGE RATES)
(1) At current exchange rates: +25.5%.
NET ATTRIBUTABLE PROFIT (LOSS)
(MILLIONS OF EUROS AT CONSTANT EXCHANGE RATES)
(1) At current exchange rates: +32.2%.
| FINANCIAL STATEMENTS AND RELEVANT BUSINESS INDICATORS (MILLIONS OF EUROS AND PERCENTAGE) | ||||
|---|---|---|---|---|
| Income statement | 2023 (1) | ∆ % | ∆ % (2) | 2022 |
| Net interest income | 2,102 | 7.7 | 19.5 | 1,952 |
| Net fees and commissions | 1,007 | 10.2 | 16.8 | 914 |
| Net trading income | 1,759 | 56.0 | 78.2 | 1,128 |
| Other operating income and expenses | (64) | 50.0 | 68.1 | (43) |
| Gross income | 4,804 | 21.6 | 34.6 | 3,950 |
| Operating expenses | (1,260) | 11.9 | 16.1 | (1,125) |
| Personnel expenses | (622) | 15.3 | 17.9 | (540) |
| Other administrative expenses | (531) | 10.3 | 17.6 | (481) |
| Depreciation | (107) | 2.2 | 1.1 | (105) |
| Operating income | 3,544 | 25.5 | 42.6 | 2,825 |
| Impairment on financial assets not measured at fair value through profit or loss | (11) | (89.8) | (82.7) | (104) |
| Provisions or reversal of provisions and other results | - | n.s. | n.s. | (12) |
| Profit (loss) before tax | 3,534 | 30.4 | 46.6 | 2,709 |
| Income tax | (1,006) | 31.6 | 47.8 | (764) |
| Profit (loss) for the period | 2,528 | 30.0 | 46.1 | 1,945 |
| Non-controlling interests | (275) | 14.2 | 60.5 | (241) |
| Net attributable profit (loss) | 2,253 | 32.2 | 44.5 | 1,704 |
Balance sheets | 31-12-23 | ∆ % | ∆ % (2) | 31-12-22 |
| Cash, cash balances at central banks and other demand deposits | 5,036 | (8.8) | (10.1) | 5,524 |
| Financial assets designated at fair value | 159,379 | 35.1 | 33.4 | 117,958 |
| Of which: Loans and advances | 84,126 | 85.5 | 85.8 | 45,360 |
| Financial assets at amortized cost | 97,325 | 8.8 | 10.8 | 89,440 |
| Of which: Loans and advances to customers | 78,376 | 1.5 | 3.7 | 77,208 |
| Inter-area positions | - | - | - | - |
| Tangible assets | 141 | 171.6 | 170.6 | 52 |
| Other assets | 10,645 | n.s. | n.s. | 862 |
| Total assets/liabilities and equity | 272,526 | 27.4 | 27.6 | 213,836 |
| Financial liabilities held for trading and designated at fair value through profit or loss | 131,118 | 32.7 | 31.5 | 98,790 |
| Deposits from central banks and credit institutions | 28,161 | 34.2 | 33.7 | 20,987 |
| Deposits from customers | 59,094 | 22.7 | 25.5 | 48,180 |
| Debt certificates | 6,076 | 14.8 | 13.5 | 5,292 |
| Inter-area positions | 29,657 | 15.8 | 16.9 | 25,609 |
| Other liabilities | 7,371 | 78.7 | 60.4 | 4,124 |
| Regulatory capital allocated | 11,049 | 1.8 | 6.2 | 10,855 |
Relevant business indicators | 31-12-23 | ∆ % | ∆ % (2) | 31-12-22 |
| Performing loans and advances to customers under management (3) | 77,532 | 0.3 | 02.5 | 77,291 |
| Non-performing loans | 905 | 20.1 | 70.7 | 753 |
| Customer deposits under management (3) | 53,545 | 13.3 | 16.0 | 47,270 |
| Off-balance sheet funds (4) | 4,189 | 139.4 | 262.6 | 1,750 |
| Efficiency ratio (%) | 26.2 | 28.5 | ||
(1) For the translation of the income statement in those countries where hyperinflation accounting is applied, the punctual exchange rate as of December 31, 2023 is used.
(2) At constant exchange rates.
(3) Excluding repos.
(4) Includes mutual funds, customer portfolios and other off-balance sheet funds.
Unless expressly stated otherwise, all the comments below on rates of change, for both activity and results, will be given at constant exchange rates. For the conversion of these figures in those countries in which accounting for hyperinflation is applied, the end of period exchange rate as of December 31, 2023 is used. These rates, together with changes at current exchange rates, can be found in the attached tables of financial statements and relevant business indicators.
Activity
The most relevant aspects related to the area's activity in 2023 were:
- Lending activity (performing loans under management) was higher than at the end of December 2022 (+2.5%). Global Transaction Banking stands out, specially in the second half of the year, and by geographical areas, the performance in the United States and in Europe (excluding Spain) is noteworthy, both in Investment Banking & Finance.
- Customer funds continued to grow by 22.0% in 2023, maintaining the positive trend in price management.
The most relevant aspects related to the area's activity in the fourth quarter of 2023 were:
- Improvement in the evolution of lending activity balances, which stood above the figure of the end of September (+1.3%), with the favorable evolution of the United States and Europe (excluding Spain) standing out again thanks to the end-of-quarter campaign.
- Customer funds increased by 11.3% mainly in Mexico and in Europe (excluding Spain).
Results
CIB generated a net attributable profit of €2,253m between January and December of 2023. These results, which do not include the application of hyperinflation accounting, represent an increase of 44.5% on a year-on-year basis and reflect the contribution of the diversification of products and geographical areas, as well as the progress of the Group's wholesale businesses in its strategy, leveraged on globality and sustainability, with the purpose of being relevant to its clients.
The contribution by business areas, excluding the Corporate Center, to CIB's accumulated net attributable profit at the end of December 2023 was as follows: 15% Spain, 29% Mexico, 29% Turkey, 13% South America and 15% Rest of Business.
All business line results have performed well, highlighting particularly the Global Transaction Banking (GTB) performance in all geographical areas, the contribution of Global Markets and Project Finance within Investment Banking & Finance (IB&F).
The most relevant aspects of the year-on-year evolution in the income statement of this aggregate are summarized below:
- Net interest income was 19.5% higher than in last year. GTB stands out, which evolved favorably, especially in Spain and the American region.
- Net fees and commissions registered an increase of 16.8%, with positive evolution in all businesses, specially in the United States and Mexico.
- Excellent NTI performance (+78.2%), mainly due to the performance of the Global Markets due to the income generated by foreign currency operations in emerging markets. By geographical areas, all of them showed growth, except Spain, which fell slightly.
- The operating expenses increased by 16.1%, driven by higher personnel expenses, partly due to measures taken by the Group to compensate for the loss in purchasing power of the workforce and salary review processes, as well as the increase in the number of employees in the area. On the other hand, general expenses continue to be affected by inflation and higher technology-related expenses. Despite this, the efficiency ratio stood at 26.2%, which represents an improvement compared to the previous year.
- Provisions for impairment on financial assets stood below the previous year, partly due to releases in Mexico.
In the fourth quarter of 2023 and excluding the effect of the variation in exchange rates, the Group's wholesale businesses generated a net attributable profit of €597m, +20.4% compared to the previous quarter. The fourth quarter reached a record high in income, highlighting the excellent results in Global Markets in emerging markets and GTB in all geographical areas, together with the release of provisions for the impairment of financial assets in the quarter.