In business abroad, ordinary earnings improved notably, driven by the strength of business in Latin America. Thus, the Spanish banks with the most international activity obtained ordinary profit in excess of pre-pandemic levels. 10  Between December 2021 and April 2023, the pass-through was 42% in the case of lending for house purchase and to NFCs, and 27% in other lending to households. 11 The year-on-year improvement in this ratio was driven by loans to firms (-1.8 pp, to 9.7%), while the ratio increased in loans to households (by 0.9 pp, to 5.7%). 12  The cumulative decline from the December 2012 peak is 79.6%. 13  ROA excluding the windfall tax on banking sector profits and other extraordinaries rose to 0.83% in Q1. 14  By comparison, net interest income rose by 17.2% between March 2014 and March 2019 and fell by 1.8% between March 2019 and March 2022. 5  Dividend payments amounted to more than € billion in 2022, with a payout ratio of 40%, similar to the pre-pandemic level. Also noteworthy were the rise in earnings per share and the sharp increase in share buy-backs made by some banks, the aim being to subsequently cancel the repurchased shares and reduce share capital, thus providing additional remuneration for shareholders. Solvency After falling by 25 bp in 2022, in 2023 Q1 the CET1 ratio was virtually unchanged on the same period of 2022.
Inflation has reached decades-long records due to the significant increase in spending during 2021, world price hikes, and problems in global supply chains. The Central Bank of Chile started its monetary policy response early in 2021 and is taking every measure necessary to bring down inflation. Local authorities have continued to work towards the consolidation of a financial stability and macroprudential framework. On financial stability policy, the mandate of the BCCh includes ensuring the normal functioning of internal and external payments systems, including the role of lender of last resort to the banking system. This gives the BCCh a broad interest in the stability of the overall financial system. Through its semiannual Financial Stability Report, BCCh identifies, monitors and reports on risks and vulnerabilities within the financial system, from a macroprudential perspective. The BCCh took the very first steps into the financial stability territory back in the early 2000s. The first Financial Stability Review of the BCCh was released in 2004, a report that contains a systemic risk assessment and analysis that provides valuable information to all participants in the local financial market, including regulators and other authorities. Thus, during the last two decades, the BCCh has consolidated its financial stability role. In turn, the CMF mandate is to safeguard the proper functioning, development and stability of the financial market, supervising banks, their subsidiaries, the 3 large saving and credit cooperatives, credit card issuers, insurance companies, securities issuers; fund managers; brokers; and financial market infrastructures. Strong coordination is required among financial authorities to preserve financial stability.