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Lending recorded a year-on-year growth of 5.9% or 9.3% excluding the Markets division activity. The sharp fall in non-performing loans has pushed the NPL ratio down to 0.19% as of 31-12-04, compared to the 0.50% at which it stood one year earlier. At the same time, the coverage ratio has gone up to 723.4% from its previous 233.8%. Meanwhile, customer funds (deposits and off-balance-sheet funds) have recorded year-on-year growth of 14.1%. Net interest income grew 10.0% against the previous year, and fee income 24.0%, such that core revenues rose 12.9%. Lower earnings from net trading income, especially those of the Markets division, brought the increase in ordinary revenues to 3.9%. This increase in earnings, along with lower general administrative expenses, which went down 1.9%, improved the cost-income ratio by 1.8 points, helping it to reach 29.9%. Operating profit rose 7.2% over the year, up to 701 million euros. The gross contribution from business and real estate projects booked under the equity method was up 23.9% over 2003, although net earnings were down due to lower dividend revenues. Portfolio turnover pushed the contribution of income from Group transactions and extraordinary net income up to 153 million euros, more than double the previous year. However, 214 million euros were set aside for loan-loss provisions, 50.1% more than in 2003. Since specific provisions went down as the NPL ratio dropped, this higher figure was due to transfers to the statistical provision and to the generic provision, the latter being a consequence of higher limits of committed loans and the growth of contingent liabilities. All this produced an attributable profit of 515 million euros and a ROE of 23.1%.
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