Spanish bank ROE reaches 16.05 percent as NPLs hit record low
Credit institutions operating in Spain recorded an annualized return on equity of 16.05 percent and reduced their non-performing loan ratio to a record low of 2.53 percent in the second quarter of 2026, according to supervisory data published by Banco de España.
Peak profitability meets solid capital
Capital ratios across Spanish credit institutions remained robust in the second quarter of 2026.
The Common Equity Tier 1 (CET1) ratio reached 14.11 percent, up from 13.75 percent a year earlier, while the total capital ratio stood at 18.30 percent, compared to 14.29 percent in 2015.
Significant institutions posted a total capital ratio of 17.97 percent, while less significant institutions recorded 25.00 percent.
Profitability strengthened, with annualized return on equity reaching 16.05 percent, nearly 9 percentage points above the 2015–2019 pre-pandemic average.
The non-performing loan ratio fell to a series low of 2.53 percent, down from 2.73 percent in the second quarter of 2025.
Ample buffers and stable risk metrics
Liquidity and asset quality metrics showed broad resilience across the sector.
The liquidity coverage ratio increased to 171.07 percent, well above the 100 percent regulatory requirement, as liquid asset buffers grew by 1.17 percent.
The aggregate leverage ratio stood at 5.60 percent, exceeding the post-pandemic average.
Meanwhile, stage 2 loans under special surveillance declined to 5.69 percent from 5.83 percent in the previous quarter.
The annual cost of risk held steady at 1.03 percent, and the loan-to-deposit ratio reached 97.17 percent.
Cyclical peak masks structural tests
Spanish lenders are enjoying record profitability and pristine credit quality across the board.
However, maintaining a 16 percent return on equity will prove difficult as monetary policy eases.
The true resilience of these capital buffers will only become clear once provisions normalize.