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

November 13, 2017

Preview Citation

Format: Chicago

Spain: Financial Sector Assessment Program-Technical Note-Determinants of Bank Profitability, (USA: International Monetary Fund, 2017) accessed November 23, 2024

Summary

This Technical Note discusses the recommendations in the Financial Sector Assessment Program for Spain regarding determinants of bank profitability. Profitability remains higher for Spanish banks than for European peers, especially supported by relatively high net interest margins; however, some Spanish banks still have higher nonperforming loans (NPLs) and provision-to-asset ratios. Panel regression analysis suggests that Spanish banks’ profitability is influenced by a combination of structural and cyclical factors, similar to those influencing other European banks and global systemically important banks. The IMF mission recommends further steps to reduce NPLs and legacy assets, continued cost-cutting measures to enhance the profitability of Spanish banks, and stronger communication between supervisors and banks on business models.

Subject: Bank soundness, Banking, Financial institutions, Financial sector policy and analysis, Financial services, Global systemically important banks, National accounts, Nonperforming loans, Personal income, Short term interest rates

Keywords: Bank, Bank characteristic, Bank size, Bank soundness, Bank supervisor, CR, Global, Global systemically important banks, Interest margin, ISCR, Nonperforming loans, Personal income, Profitability, Return on equity, Short term interest rates, Spanish bank

Publication Details

Pages:

35
Volume:

---
DOI:

---
Issue:

---
Series:

Country Report No. 2017/339
Stock No:

1ESPEA2017009
ISBN:

9781484327159
ISSN:

1934-7685

FACTSHEETS

RESOURCES

TOPICS

Flagship Publications

Other Publications

IMF reports and publications by country

Regional Offices

All News

See Also

For Journalists

Press Center

RESOURCES

FLAGSHIPS

KEY SERIES

IMF NOTES

IMF Staff Country Reports