In the fourth quarter of 2020, Spanish banks remained in last place in the entire European Union with regard to the CET1 capital ratio, a magnitude that is usually used as a reference for the solvency of a bank, and among those with lower profitability, according to consolidated data published by the European Central Bank (ECB). Between October and December of last year, Spanish entities offered a return on equity (RoE) of -3.6%, compared to -2.3% in the previous three months and far from 6.8 % from the previous year.
Thus, the profitability of Spanish banks was below the 1.9% average for the euro area, as well as for the EU as a whole, with 2.3%. Only the Greek banks, with a profitability of -7.8%, and the Irish, with -6.3%, registered a worse profitability data than the Spanish ones. On the other hand, Romanian banks were the most profitable in the EU, with a return on equity of 12.4%, ahead of Slovenian banks, with a RoE of 11.3%.
On the other hand, as has been customary in recent quarters, Spanish banks have once again ranked last in terms of the CET1 capital ratio, standing at an average of 13.2%, slightly above 12.8 % of the third quarter. In the euro zone as a whole, the CET1 rate fired 2020 by an average of 15.6%, four tenths above the level of the third quarter, while in the EU it was 15.8%, compared to 15.5% of the previous three months.
In terms of the NPL ratio (NPL), the EU as a whole recorded a share of 2.6%, the same as the euro area average. The highest levels of doubtful assets were recorded in Greek banks, with a ratio of 26.4%, while Swedish banks recorded the lowest proportion of doubtful assets, with a ratio of 1%. For their part, Spanish banks recorded an NPL ratio at the end of 2020 of 2.9%.
The ECB indicated that the data for December 2020 refer to 327 banking groups and 2,593 independent credit institutions, including branches and foreign subsidiaries, operating in the EU, with a coverage of almost 100% of the balance sheet of the banking sector of the Twenty-seven.