• Seasonal drop in lending
  • Significant improvement in net interest income
  • Recording of the temporary tax on credit institutions for the financial year 2023
  • Cost of risk remains at low levels, in line with the end of 2022

Business activity (1)

(1) Excluding repos.

Net interest income/AVERAGE TOTAL ASSETS

Operating income (Millions of euros)

Net attributable profit (LOSS) (Millions of euros)

Financial statements and relevant business indicators (Millions of euros and percentage)

Income statement 1Q23 ∆% 1Q22 (1)
Net interest income 1,183 38.2 856
Net fees and commissions 536 536
Net trading income 120 (36.9) 190
Other operating income and expenses (112) n.s. 73
Of which: Insurance activities 99 10.2 90
Gross income 1,726 4.3 1,655
Operating expenses (753) 6.2 (709)
Personnel expenses (414) 8.2 (383)
Other administrative expenses (245) 10.3 (222)
Depreciation (94) (9.8) (105)
Operating income 974 2.9 946
Impairment on financial assets not measured at fair value through profit or loss (114) 27.0 (89)
Provisions or reversal of provisions and other results (9) (55.0) (19)
Profit (loss) before tax 851 1.7 837
Income tax (310) 30.1 (238)
Profit (loss) for the period 541 (9.6) 599
Non-controlling interests (1) (33,3) (1)
Net attributable profit (loss) 541 (9.5) 598
Balance sheets 31-03-23 ∆% 31-12-22 (1)
Cash, cash balances at central banks and other demand deposits 50,952 3.6 49,185
Financial assets designated at fair value 137,432 8.7 126,413
Of which: Loans and advances 47,764 13.9 41,926
Financial assets at amortized cost 207,349 1.4 204,528
Of which: Loans and advances to customers 172,085 (1.1) 173,971
Inter-area positions 37,955 (2.5) 38,924
Tangible assets 2,957 (1.1) 2,990
Other assets 5,075 (0.0) 5,076
Total assets/liabilities and equity 441,720 3.4 427,116
Financial liabilities held for trading and designated at fair value through profit or loss 96,927 14.5 84,619
Deposits from central banks and credit institutions 60,305 16.6 51,702
Deposits from customers 214,476 (3.0) 221,019
Debt certificates 40,898 0.3 40,782
Inter-area positions
Other liabilities 14,777 (6.9) 15,870
Regulatory capital allocated 14,337 9.2 13,124
Relevant business indicators 31-03-23 ∆% 31-12-22
Performing loans and advances to customers under management(2) 169,215 (1.2) 171,209
Non-performing loans 7,668 (2.8) 7,891
Customer deposits under management (2) 213,311 (3.1) 220,140
Off-balance sheet funds (3) 90,577 4.4 86,759
Risk-weighted assets 116,550 1.8 114,474
Efficiency ratio (%) 43.6 47.5
NPL ratio (%) 3.9 3.9
NPL coverage ratio (%) 59 61
Cost of risk (%) 0.27 0.28

(1) Restated balances according to IFRS17 - Insurance contracts.

(2) Excluding repos.

(3) Includes mutual funds, customer portfolios and pension funds.

Macro and industry trends

After growing by 5.5% in 2022, GDP will increase by around 1.6% in 2023 according to BBVA Research, a forecast two tenths of a percentage point higher than the previous forecast, mainly due to the significant reduction in energy prices and the dynamism of economic activity in recent months. Growth is also expected to moderate further ahead, in line with the outlook of tighter monetary conditions and a slowdown in global and European growth. Annual inflation, which closed 2022 at 5.7%, moderated to 3.3% in March, helped by lower energy prices and favorable base effects. It is expected to average around 3.9% in 2023, above the ECB's 2% target.

As for the banking sector, based on data as of January 2023, the volume of credit to the private sector remained stable, with a slight decline of 0.6% year-on-year. At the end of December 2022 (latest data available by credit portfolios), lending to households remains stable while lending to companies fell by 1.1% in the year. Customer deposits grew by 0.6% year-on-year with data as of the end of January 2023, thanks to the growth in demand deposits, as time deposits continued their downward trend, albeit at a slower pace (-4.5% year-on-year). The NPL ratio continued to fall to 3.56% in January 2023, 77 basis points lower than in January 2022. It should also be noted that the system maintains comfortable solvency and liquidity levels.


The most relevant aspects related to the area's activity during the first quarter of 2023 were:

  • Lending activity decreased (-1.2%), as a result of mortgage payoffs by some customers, which were not offset by the growth in the loans to SMEs (+0.7%) and the public sector (+3.5%).
  • In terms of credit quality, the NPL ratio showed a minor decrease of 5 basis points compared to the end of December 2022 and stood at 3.9%, mainly due to the volume of write-offs made during the quarter. The coverage ratio also decreased during the quarter, to 59%, due to the aforementioned shift to write-offs.
  • Total customer funds recorded a reduction of 1.0%, which is explained by the lower balances of customer deposits under management, which in December 2022 included extraordinary payments, and customer contributions to off-balance sheet funds. Thus, the variation in demand deposits was -3.8% and +3.3% in the case of time deposits, with the latter having a limited weight in total customer deposits (10.7% at the end of March 2023). Off-balance sheet funds (mutual and pension funds) increased by 4.4%, favored by net contributions in the quarter, despite the turbulence in the markets towards the end of the quarter.


Spain generated a net attributable profit of €541m in the first quarter of the year 2023, 9.5% lower than in the same period of the previous year, due to the recording, on January 1, 2023, of the temporary tax on credit institutions and financial credit institutions for €225m, included in the other operating income and expenses line of the income statement. In addition, the dynamism of the net interest income stands out.

The most notable aspects of the year-on-year changes in the area's income statement at the end of March 2023 were:

  • Net interest income, with a significant year-on-year growth of 38.2%, continued to benefit from the improvement in customer spreads, in a context of interest rate hikes.
  • Net fees and commissions were in line with the previous year, as a result of a lower contribution from asset management and banking services fees, offset by higher income from wholesale operations.
  • Decrease in the year-on-year NTI contribution (-36.9%), with a lower contribution from the ALCO portfolios, partially offset by the good performance of Global Markets.
  • Other operating income and expenses compared negatively with the previous year, due to the €225m recorded in this line for the temporary tax on credit institutions and financial credit institutions for the year 2023. For its part, the performance of the insurance business was higher than in the previous year (+10.2%).
  • Growth in operating expenses (+6.2%), both in personnel expenses due to higher fixed remuneration, with additional measures that improve those of the sectoral wage increase agreement, and in general expenses, as a result of inflation, especially higher IT expenses.
  • For its part, the gross income increased by 4.3%, below the growth in expenses. This increase is affected by the recording of the temporary tax on credit institutions and financial credit establishments. Thus, the efficiency ratio stood at 43.6%.
  • Impairment on financial assets was 27.0% higher than in the first quarter of 2022, due to higher provisions needs in the loan portfolio, as well as the recording of some non-recurring positive items in the first quarter of 2022. As a result of the above, the cumulative cost of risk at the end of March 2023 stood at 0.27%, below the 0.28% registered at the end of December 2022.
  • Provisions and other results closed the first quarter of 2023 at €-9m, which compares favorably with the previous year, thanks, among other factors, to lower provisions for legal contingencies and higher release of provisions for risks and contingent commitments.