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Cecabank Report 2018
Our business model
Banking business developments
The continued expansion of the economy has favoured a moderate
performance of the retail business and an improvement in the credit
quality. New loans have grown by 9% throughout the year, where the
increase in loans to families, both for housing and consumption, stand out.
Despite this, in terms of balance, loans to the private sector continued to
drop in 2018, reaching -2% year-on-year in the entire system. Retail deposits
have grown at a higher pace, 3%, driven by demand deposits, although
hindered by term deposits due to the environment of low interest rates, the
latter representing approximately 20% of the total.
The volatility of the financial markets in recent months has influenced
negatively the evolution of investment and pension funds. Investment funds
registered a year-on-year negative annual growth rate of -2.1% in December,
as so did pension funds, -3.7%. According to INVERCO data, investment funds
dropped 5,572 million euros in 2018, compared to the accumulated growth
in the same period of 2017 (27,705 million euros). This is a consequence
of the capital losses registered so far this year (-13,984 million euros) and
the increase of net subscriptions being well below those registered in the
previous year (8,410 million euros, compared to 21,220 million euros in
2017). In terms of categories of funds, global funds lead equity growth with
an 18.5% rise in the year (6,542 million euros more than in December 2017).
On the other hand, passive management funds continue to accumulate
the highest reduction of equity, more than 3,425 million euros in 2018.
Investment funds close the year with a drop in annual accumulated return
of -4.6%.
Dynamism in the retail business
and improved credit quality
The financial markets have been
marked by a high volatility
4 | 4.1