January-June 2013

Macro and industry trends

The U.S. economy has maintained its sustained growth since the beginning of the year. The unemployment rate continues to fall, although job creation in the second quarter of 2013 has been somewhat weaker than in the first quarter of the year. The financial environment has been altered following the Fed’s announcement of its plans to start limiting the quantitative easing program in the last quarter of the year, as long as the country’s economy continues to show it is sound.

The U.S. dollar has depreciated in general terms against the euro both in the quarter and over the last twelve months. This has had a negative effect on the year-on-year and quarterly comparison of the Group’s financial statements. Therefore, to better understand the evolution of the business figures, the percentages given below refer to constant exchange rates, unless otherwise indicated.

The health of the banking system continues to improve in the United States. The asset quality of consumer and corporate loans has returned to pre-recession levels, while mortgage defaults have declined to below 10%, the lowest figure since mid-2009. This evolution explains why the NPA ratio at the end of the first quarter of 2013 (latest available data) stands at 4.4%. The financial industry’s earnings continue to improve thanks to higher non-financial income and lower provisions. According to information for the first quarter of 2013, domestic deposits declined slightly following the high rate of growth in the fourth quarter of 2012. Lastly, housing prices have increased in recent months and the construction of new homes has hit its highest level in the last 5 years.