RESULTS

Solid business model which enables us to generate value based on profitability, efficiency and innovation, and obtain profits on a recurring basis

First quarter attributable profit of EUR 1,840 million, after recording net charges of EUR 108 million (net of tax).

Excluding these charges, underlying profit was 5% lower than in the first quarter of 2018 (-2% in constant euros). This result was affected by the negative performance of markets in the first quarter, the impact of applying IRFS 16 and the high inflation adjustment in Argentina.

The underlying P&L trends remained solid, with:

Solid customer revenue. Of note, growth in net interest income.

Costs beginning to reflect the synergies obtained in various units.

Lower loan-loss provisions, with improved credit quality.

Q1'19 underlying ATTRIBUTABLE PROFIT*

Increased weight of The Americas in Group profit

*Excluding Corporate Centre and Spain Real Estate Activity.
*Excluding net capital gains and provisions.

underlying ATTRIBUTABLE PROFIT TO THE GROUP*

eur million

*Excluding net capital gains and provisions.

Q1'19 underlying ATTRIBUTABLE* PROFIT IN CORE MARKETS

EUR MN AND % CHANGE VS. Q1'18 IN CONSTANT EUROS

*Excluding net capital gains and provisions.

The information shown above in relation to the different units has been prepared in accordance with homogeneous management criteria for the whole Group and may therefore differ from the information published for each company on an individual basis.

EARNINGS IN THE MAIN GEOGRAPHIES

CONSTANT EUROS

United States:

First quarter attributable profit of EUR 182 million (+35% year-on-year). This growth was due to the positive evolution of almost all P&L lines, particularly customer income at SBNA and SC USA because of greater lending and leasing volumes.

 

Continental Europe:

Attributable profit of EUR 859 million, 7% lower year-on-year and including a charge of EUR 12 million for restructuring costs in Poland.

Excluding this charge, underlying profit of EUR 871 million (-6% year-on-year), mainly due to lower gross income resulting from reduced gains on financial transactions and fee income, as net interest income was up 4%. Costs fell 2%, reflecting the synergies of the integrations in all units. Loan-loss provisions remained virtually stable.

United Kingdom:

First quarter attributable profit of EUR 205 million, which includes a charge of EUR 66 million for restructuring costs. Excluding this, underlying attributable profit of EUR 271 million, 16% lower year-on-year.

These results reflect the tougher competition, market uncertainties and the costs related to projects and technology.

Latin America:

First quarter attributable profit of EUR 1,287 million, up 26%, and including a capital gain of EUR 150 million from the sale in Argentina of 51% of our stake in Prisma and the revaluation of the rest of the stake.

Excluding this capital gain, underlying profit was up 11% with a good performance of net interest income and net fee income, due to growth in volumes, management of spreads and greater customer loyalty. The cost of credit was also better. Of note were results in Brazil, with EUR 724 million (+15%), and Mexico, with EUR 206 million (+12%).

United States:
First quarter attributable profit of EUR 182 million (+35% year-on-year). This growth was due to the positive evolution of almost all P&L lines, particularly customer income at SBNA and SC USA because of greater lending and leasing volumes.

Continental Europe:
Attributable profit of EUR 859 million, 7% lower year-on-year and including a charge of EUR 12 million for restructuring costs in Poland.

Excluding this charge, underlying profit of EUR 871 million (-6% year-on-year), mainly due to lower gross income resulting from reduced gains on financial transactions and fee income, as net interest income was up 4%. Costs fell 2%, reflecting the synergies of the integrations in all units. Loan-loss provisions remained virtually stable.

United Kingdom:
First quarter attributable profit of EUR 205 million, which includes a charge of EUR 66 million for restructuring costs. Excluding this, underlying attributable profit of EUR 271 million, 16% lower year-on-year.

These results reflect the tougher competition, market uncertainties and the costs related to projects and technology.

Latin America:
First quarter attributable profit of EUR 1,287 million, up 26%, and including a capital gain of EUR 150 million from the sale in Argentina of 51% of our stake in Prisma and the revaluation of the rest of the stake.

Excluding this capital gain, underlying profit was up 11% with a good performance of net interest income and net fee income, due to growth in volumes, management of spreads and greater customer loyalty. The cost of credit was also better. Of note were results in Brazil, with EUR 724 million (+15%), and Mexico, with EUR 206 million (+12%).

Income statement

MILLION EUROS
% change vs. Q1'18
Q1'19 EUR Constant
EUR
Net interest income 8,682 2.7 4.5
Gross income 12,085 (0.5) 1.6
Net operating income 6,327 (0.9) 1.4
Underlying profit before taxes* 3,684 (0.1) 2.8
Underlying attributable profit to the Group* 1,948 (5.2) (2.2)
Attributable profit to the Group 1,840 (10.4) (7.7)
*Excluding net capital gains and provisions.

FINANCIAL REPORT JANUARY - MARCH 2019

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