The profitability of Spanish banks increased to 12.3% in the third quarter of 2023, according to the latest data from the Bank of Spain. This ratio is above the European average, but below that obtained by other banking systems such as the Italian, Portuguese, or Dutch. The profitability obtained so far remains lower than the 15% seen before the financial crisis and that achieved by major US banks.
In his latest public appearance, the Chair of the Supervisory Board of the European Central Bank (ECB), Andrea Enria, noted that European banks will have to face the challenges of tighter financial conditions, still high inflation, geopolitical tensions, and a scenario of moderating growth in the coming months. “These concerns—coupled with investor disappointment over the fact that some governments are introducing taxes, levies, or other public policies that negatively affect banks’ net earnings—are also reflected in the fact that current market valuations of eurozone banks have not substantially exceeded pre-pandemic levels,” Enria said.
Profitability is synonymous with sustainability for investors and savers seeking dividends. It is also essential for banks to continue strengthening their capital so that they have the capacity to fulfil their primary role of providing financing. Having a solid financial sector is key to driving economic growth and competitiveness, but also to supporting companies and families in successfully overcoming the challenges they face in the future.
José Luis Martínez Campuzano, spokesperson for the Spanish Banking Association
