The spokesperson for the national financial sector will travel to Santander on Wednesday to analyse the business\u2019s challenges at El Diario\u2019s \u2018Economic Forum\u2019.<\/p>\n
The Spanish banking sector is coming off a year of record profits, supported by a context of sharp interest-rate rises that allowed activity margins to widen. Even so, it still faces several challenges, such as the ongoing threat of incursions by the world\u2019s major technology companies. Alejandra Kindel\u00e1n, President of the Spanish Banking Association (AEB), will analyse the outlook next Wednesday in Santander, as she will attend at 9:30 a.m. at the Hotel Bah\u00eda to take part in a new edition of El Diario\u2019s \u2018Economic Forum\u2019. <\/p>\n
What are those challenges and issues in banking that you intend to discuss?<\/strong><\/p>\n Wednesday\u2019s meeting will be a good opportunity to take stock of the banking sector, which is currently strong, with solid management models, non-performing loans under control, and capital and liquidity ratios above requirements. A sector that provides security and strength in the face of a complex geopolitical reality, a moderate growth outlook, and trillion-euro financing needs within the European Union to meet investments that are already being identified as necessary and urgent, such as defence, infrastructure, energy, healthcare, innovation, etc. <\/p>\n It will be a good opportunity to explain where profitability comes from and where it is headed\u2014an existential issue for banking. When we hear talk of billions, these are amounts that need to be put into context and, above all, it is necessary to detail what percentage is allocated to capital to continue providing credit, to dividends for shareholders\u2014more than 5 million retail investors who rely on those dividends as a supplement to their income\u2014and also to paying taxes. Last year, AEB banks paid \u20ac12.5 billion in corporate tax and the temporary levy alone. Another aspect I would like to detail is the banking sector\u2019s social commitment, whose greatest expression is the granting of credit to support the development of personal and business projects, fostering economic growth and, with it, social progress. But it also faces national challenges such as population ageing, services in rural Spain, and the necessary processes of digital upskilling and financial education. <\/p>\n How far can the new model based on greater digitalisation and less physical presence be stretched?<\/strong><\/p>\n The Spanish banking business model itself\u2014retail, close to the customer, supportive, there to enable personal and business projects\u2014means that digitalisation and physical presence are two sides of the same coin. As for physical presence, Spain has the second-densest branch network in the euro area, and if we add up all physical access points to cash\u2014including ATMs, mobile branches, agents, etc.\u2014we reach more than 77,500 points. Few public or private services have that capacity and that reach. <\/p>\n The sector is on the verge of further consolidation with the talks between BBVA and Sabadell…<\/strong><\/p>\n As head of the AEB, it is not for me to comment on this news. The AEB fully respects its members\u2019 business strategies and does not assess them. What I would like to highlight, in general terms, is the high level of competition in Spain\u2014both in terms of the number of competitors and also customer demands. <\/p>\n Will this consolidation process reach the European level?<\/strong><\/p>\n Without going into that issue, what Europe needs is for the financial system to have European scale and ambition, and for that we must work to avoid fragmentation. One issue is essential: the third pillar of the banking union. After the Single Supervisory Mechanism and the Single Resolution Mechanism, we still lack a single deposit guarantee mechanism. <\/p>\n When will interest rates start to come down? How will that affect banks\u2019 results? <\/strong><\/p>\n I have no more details than what the European Central Bank has made public, which points to the summer. If we bear in mind that the rapid rise in interest rates in monetary policy aimed to cool the economy to bring down inflation, this has led to a slowdown in lending, mainly what is considered investment credit. A cut in those rates would mean a reactivation, more lending and therefore a higher volume of business. The banking sector is approaching this situation of falling rates and uncertainty calmly, thanks to its strength and a very positive position in terms of profitability, non-performing loans, liquidity, efficiency, solvency and resilience. <\/p>\n With extraordinary profits in 2023 and good prospects in 2024, has the sector already accepted the Government\u2019s extraordinary tax?<\/strong><\/p>\n Accepted? Not at all. Regarding the temporary levy, you are well aware of our opposition due to its counterproductive effects and because the circumstances that led to it have changed; we have challenged it in court. What is being discussed now is a “permanent tax”. With a scenario of constant geopolitical tensions, falling interest rates, and financing needs to meet the investments in Open Strategic Autonomy that we have discussed, this makes no sense. <\/p>\n