Industry Trends

The health of the banking system continues to improve in the United States. The number of banks experiencing problems has dropped. In addition, asset quality in general maintains a positive trend, with the NPA ratio falling for the ninth quarter in a row to 5.05%, the lowest figure since the fourth quarter of 2008. Asset quality has therefore become a favorable aspect for a growing majority of banks which, generally speaking, have returned to normal levels of provisions and reduced their NPA ratios.

As regards lending, business and industrial sector and car finance continue to post better results than other segments. The residential mortgage portfolio has also seen significant growth, as it has benefited from refinancing associated with government aid. However, as a whole, growth in lending has been modest in the third quarter of 2012, as it has been negatively affected by pressures on prices.

Finally, liquidity and capital levels are at record levels in the country’s financial industry, with capital allocation improved.

As a result, and according to data for the first half of 2012, the banking sector in the United States posted better earnings than in previous periods, although interest rates are expected to remain low and exert pressures on net interest income in the short term. Income from fees and commissions will also be lower as a result of regulatory changes. Against this background, banks have once again focused their attention on cost management. Streamlining of branches and investment in technology have received special attention.