Spanish banking is going through a period of strength that, in Mar\u00eda Abascal\u2019s view, should be read in a European context. The Director General of the Spanish Banking Association (AEB) maintains that the sector is solidly positioned to face the economic and geopolitical cycle, and also to deal with the new context of greater integration across the continent. \u201cPan-European consolidation is the litmus test for the banking union,\u201d she says. However, for it to progress, she considers it essential to move forward on several issues: \u201cWe need to complete the common architecture with a European deposit guarantee fund, harmonise national frameworks, and enable more integrated management of capital and liquidity.\u201d Another barrier she identifies in the single banking market is \u201cdivergence in national regulation between countries. Differences persist in areas such as insolvency law or consumer protection,\u201d she notes. Overcoming them will be decisive for cross-border integration to stop being an objective and become a reality. <\/p>\n\n
Abascal describes the sector\u2019s current situation as \u201cvery attractive\u201d: solid results, robust financial metrics, capital and liquidity levels comfortably above regulatory requirements, non-performing loans at historic lows, and an efficiency ratio that reflects \u201cthe good management behind it.\u201d<\/p>\n\n
Structural challenges the sector faces<\/strong><\/p>\n\n On this basis, Spanish banking now faces structural challenges that can strengthen its role in Europe. The first is geopolitical uncertainty. \u201cWe are entering a new international economic order, and Spanish banking is very well prepared because it is used to operating in volatile environments,\u201d she says. Risk management and governance, she stresses, are a structural part of institutions\u2019 models and processes. <\/p>\n\n The second major challenge is technological disruption. The sector has led Europe\u2019s digital transformation for years, but the operating framework has changed. \u201cBanks no longer compete only with banks, but with other players, such as banking fintechs,\u201d she warns. In this environment, institutions continue to step up their investment in digitalisation: \u201cWe are at a time of growing commitment to technology to prepare for the future: not only by adopting artificial intelligence, but also by strengthening security, cyber resilience and operational resilience.\u201d A process that, in her view, \u201cwill lead to improved efficiency.\u201d <\/p>\n\n In a European context<\/strong><\/p>\n\n Beyond the structural challenges, the shift in monetary policy in recent years has shaped the evolution of bank profitability. Between 2022 and 2023, interest rate rises boosted margins; since 2024, with the start of cuts, the scenario has changed again. Nevertheless, Abascal is confident that \u201cbanks have prepared for this situation by adjusting their balance-sheet mix, diversifying their sources of income and controlling costs to ensure the sustainability of that profitability.\u201d <\/p>\n\n From a European perspective, she stresses that the sector is today \u201cmore relevant than ever.\u201d The continent needs to strengthen its competitiveness in strategic areas that require major investment. \u201cBanks finance 75% of those needs, but we also need to move towards a broader ecosystem that makes it possible to channel a greater share of savings into capital markets.\u201d <\/p>\n\n In this environment, private markets play a complementary role. \u201cThe sector is the main financier of the European economy, but we have new needs,\u201d she notes. In her view, it is about adding capabilities: \u201cPrivate markets complement the role of banks in a context of growing financing needs. We need an ecosystem in which all players contribute.\u201d The goal is \u201cto strengthen the ecosystem so that everyone can grow.\u201d <\/p>\n\n The SIU and channelling European savings<\/strong><\/p>\n\n In this logic of strengthening a single financial market, the proposal for the Savings and Investment Union (SIU) fits in. \u201cBanks are fully in favour,\u201d Abascal assures. As the association\u2019s spokesperson, she explains that they see the project \u201cas a natural evolution of the capital markets union.\u201d <\/p>\n\n Her diagnosis is clear: \u201cEurope does not have a savings deficit, but rather a problem of channelling that capital into long-term investments, preferably within Europe.\u201d In that process, banks play a dual role: as the main financier of SMEs and as a facilitator of access to capital markets, both through placements and securitisations and, especially, through the distribution of investment funds and pension plans. \u201cWe must not forget that the main distribution channel for collective investment vehicles in Spain is banking, which explains the very close and positive relationship that exists with asset managers.\u201d <\/p>\n\n That said, for the SIU to succeed, Abascal introduces a decisive condition: the tax incentive. \u201cIt is essential to have that incentive. Without it, it is unlikely to take off,\u201d she warns. What has happened in recent years with pension plans is, in her view, a clear example: \u201cThe reduction in tax incentives has had a direct impact on assets under management because investors are very sensitive to these stimuli.\u201d This support mechanism must be accompanied by financial education: \u201cA well-informed investor, who understands the risks and opportunities, is in a better position to make long-term investment decisions.\u201d <\/p>\n\n She acknowledges that the profile of Spanish savers remains conservative, which reinforces the need for education at a time when Europe needs to mobilise around \u20ac1.2 trillion a year in areas such as digitalisation, defence, industrialisation or the energy transition. \u201cSomething that cannot be addressed with public funds alone,\u201d she stresses. The key is \u201cto channel existing savings more efficiently.\u201d <\/p>\n\n More capital, less credit<\/strong><\/p>\n\n On the regulatory front, Mar\u00eda Abascal stresses that there is broad consensus on the need to simplify as a way to strengthen competitiveness and growth. However, she calls for greater clarity, especially regarding capital. \u201cSupervisors\u2019 discretionary decisions have significantly increased requirements, which ultimately penalises lending,\u201d she warns. She also expresses concern about the debate around AT1s, or CoCos, \u201cinstruments recognised in Basel and valued by investors.\u201d <\/p>\n\n