##able debt instruments ( whose share of the sector ’ s funding had dropped in recent years ) increased their weight in liabilities by around 2 pp in 2022. thus, between december 2021 and april 2023, the cost of deposits with agreed maturity increased by 0. 65 pp for households and by 1. 5 pp for non - financial corporations ( nfcs ), while the 12 - month euribor rose by more than 4 pp. this cost of equity stands somewhat below the 7. 2 % seen in 2019, prior to the pandemic. this ratio has fallen by around 30 pp since march 2022, at least partly in response to the eurosystem ’ s gradual liquidity withdrawals. consolidated debt securities grew by 11. 7 % and represented 13. 6 % of total assets at december 2022 ( 10. 7 % in 2007 ). 2023. 10 this was also the case for new lending, although it occurred more slowly in the housing segment than during past periods of monetary policy tightening. by sector, the stock of loans to nfcs and sole proprietors fell by 1. 3 % year - on - year in march, while loans to households dipped by 1. 1 %, with the stock of mortgage lending dropping by 1. 6 %. credit quality credit quality has continued to improve. in particular, the non - performing loan ( npl ) ratio has maintained its downward movement, to stand at 3. 4 % in march, its lowest level since 2008 and 1. 4 pp below its 2019 level. there was a reduction in stage 2 loans in the same period, to stand at 7. 2 % in march, although this level remains above its pre - pandemic figure of 5. 9 %. 11 forborne exposures also dropped, to 4. 1 % of all lending to the resident private sector in march 2023, below their pre - pandemic level ( 5 % ), while foreclosed assets saw a 14. 5 % fall in 2022. 12 as for credit backed by spain ’ s official credit institute ( ico ), the proportion classified as stage 2 shrank in the 12 - months before march 2023 by 3. 2 pp to 19. 6 %. however, nonperforming assets in this portfolio increased by 70 % in 2022, lifting the npl ratio to 8. 2 % ( up by 4. 1 pp on march 2022 ). the reduction in the size of this portfolio (

on the same period of 2022. overall, in the years following the covid - 19 crisis, the average cet1 ratio has been slightly more than 1 pp above the average ratio of the period between the end of the global financial crisis and the start of the pandemic. in any event, spanish banks ’ cet1 ratio is at the lower end of the distribution for european banks of different sizes and business models. but it is well ahead of the average requirements and offers good aggregate loss - absorbing capacity. final assessment over a broader timescale, it is clear that the solvency and liquidity of both the spanish and the european banking sector have improved substantially over the last decade. this has been driven, in part, by the internationally agreed regulatory reform, which in the european union applies to all banks, irrespective of size. indeed, the strengthening of the banking sector and the regulatory reform have proved vital to enable the sector to successfully overcome the extraordinary stress episodes of recent years. in spain, the fact that business models are strongly oriented towards the retail segment bolsters their capacity to absorb adverse shocks to wholesale market financing conditions and has enabled them to record a favourable financial performance of late, both in terms of higher profitability and improved balance sheet quality. however, confidence in our banking system must not allow us to overlook the existing risks, which remain significant in both the short and the long run. in the short term, the present situation, marked by the necessary increase in interest rates and the high uncertainty regarding growth and inflation projections, means that banks face significant risks in different balance sheet segments. at the net interest income level, the substantial improvements recorded by some banks cannot be considered long - lasting and it is reasonable to believe that, as the higher interest rate environment persists, their funding costs will likely rise further. the increase in the cost of funding may accelerate for banks, driven by the gradual reduction in eurosystem liquidity facilities, and their increased cost, and the developments seen in deposits, with depositors seeking better remunerated financial instruments and part of the savings buffers accumulated during the pandemic having been depleted. the continuation and / or heightening of the recent tensions in the global banking sector could also contribute to this increase. moreover, the value of fixed income financial exposures ( e. g. bonds, especially those with longer maturities ) has declined. in addition, credit quality, which remains highly resilient, may ultimately