Spanish banking reaches solvency highs with historic low delinquency

The maximum quality capital ratio (CET1) of Spanish banks rose to 14.26% in the first quarter of 2026, while delinquency fell to 2.61%, its lowest level. However, profitability is supported by extraordinary items.

The 152 entities operating in Spain, with a total asset of 4.555 billion euros, present the best solvency ratios in their history. This is reflected in the Supervisory Statistics of Credit Entities from the Bank of Spain for the first quarter of 2026, published this Monday.

The maximum quality capital (CET1) ratio stood at 14.26%, almost six tenths above the same period last year. The Tier 1 ratio rose to 15.75% and the total capital ratio reached 18.36%, four points above the 2015 level. These figures comfortably exceed the pre-pandemic average and confirm a decade of strengthening capital buffers.

Delinquency at historic lows

The rate of doubtful loans dropped to 2.61%, three tenths lower than a year ago and the lowest level in the entire historical series available. The improvement is partly explained by the behaviour of special surveillance credits (phase 2), which fell from 6.05% to 5.83%.

However, the cost of risk surged to 1.05%, almost two tenths higher than in the previous quarter. This is a signal to watch, although for now it does not tarnish an overall picture of sustained improvement in balance sheet quality.

Record profitability, with nuances

The return on equity (ROE) for the sector as a whole reached 17.33% in March, almost three points higher than a year earlier and nearly ten points above the average from 2015 to 2019. These are levels not seen before the financial crisis.

The Bank of Spain itself notes that this jump is due to extraordinary and non-recurring results. Discounting this effect, the 'real' profitability of the banking business would remain at 14.78%, a notably high figure but one that gives a more accurate picture of recurring business.

By entity size, the differences are notable: significant banks (large banks supervised by the ECB) raise their profitability to 18.16%, while less significant entities see it drop to 9.81%.

For investors, this data confirms the sector's solidity, although it is worth noting that part of the profit is one-off. The Spanish banking sector remains a pillar of the Ibex 35, but caution is advisable.