Spain : Financial Sector Assessment Program-Technical Note-Determinants of Bank Profitability

Author/Editor:

International Monetary Fund. Monetary and Capital Markets Department

Publication Date:

November 13, 2017

Electronic Access:

Free Full Text. Use the free Adobe Acrobat Reader to view this PDF file

Summary:

While system-wide profitability for Spanish banks has recovered gradually since the crisis, the return on equity remains below the cost of capital (Bank of Spain May 2016 FSR).2 Profitability remains higher for Spanish banks compared with European peers, especially supported by relatively high Net Interest Margins (NIMs), however, some Spanish banks still have higher non-performing loan (NPL) and provision to asset ratios.3 The internationally oriented Spanish banks perform more strongly in NIMs compared with domestically oriented banks, mainly supported by their subsidiaries abroad (particularly in Latin America). The efficiency of Spanish banks as measured by the cost-to-income ratio remains favorable compared with peers. On excess capacity, the branch per capita level is relatively high for Spanish banks, while bank employees per capita remains low compared with European peers.

Series:

Country Report No. 17/339

Subject:

English

Publication Date:

November 13, 2017

ISBN/ISSN:

9781484327159/1934-7685

Stock No:

1ESPEA2017009

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

35

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