“Two years after the crisis, Spanish banks continue to operate with profits, good profitability, and without requiring public capital aid, despite the difficulties still presented by the international economic environment and financial markets,” noted the Secretary General of the Spanish Banking Association (AEB), Pedro Pablo Villasante, during the presentation of the Spanish banking sector results for the first quarter of 2010.<\/p>\n
Pedro Pablo Villasante commented that, despite the clear improvement experienced by Western economies in late 2009 and early 2010, doubts still persist regarding the intensity of the economic recovery, which in the case of Spain is being slower and less vigorous than in other European countries. Furthermore, a situation of extreme tension has reappeared in the financial markets. <\/p>\n
In this difficult economic environment, Spanish banks managed to achieve positive results in the first quarter of 2010, although they were lower than those published in the same period of the previous year. As Villasante explained, this trend reflects the effect of lower economic activity recorded as a consequence of the contraction in household consumption and business investment. For banking entities, these factors have translated into a generalized drop in credit demand and a worsening of the quality of their portfolios, which are suffering severe increases in non-performing loans and, consequently, the need to provide higher provisions for bad debts. <\/p>\n
In this context, the Secretary General of the AEB indicated that Spanish banking has continued during the first quarter of the year to develop a prudent policy, focused on cost containment, the management of funding sources and, above all, on capital strengthening through the increase of equity and the allocation of provisions for bad debts.<\/p>\n
“All this has been possible thanks to the capacity of Spanish banking to generate ordinary and recurring results, supported by the defense of business margins, the enhancement of its competitive capacity, and effective geographic and business diversification,” he said. In this regard, he commented that Spanish banks have known how to grow, both inside and outside Spain, which has allowed them to achieve effective diversification of their income and business sources. “There are few references to compare the successful international expansion that Spanish banking has undertaken in many countries, even in those that are economically and financially more developed than ours,” he added. <\/p>\n
The Secretary General of the AEB considered that the reinforcement of solvency has been and is an essential part of the strategy undertaken by Spanish banking since the financial turmoil began in 2007. He stressed in this regard that Spanish banks are carrying out this process without resorting to any type of public aid and by their own means through the capitalization of a large part of their profits and new capital issues. “This capital reinforcement is allowing our entities to maintain the development of their activities and businesses, as well as to enhance their competitive capacity.” <\/p>\n
In terms of solvency, he highlighted that Spanish banks have continued to make a very significant effort in provisioning through the allocation of high provision funds, calculated according to strict write-down criteria. All of this\u2014the increase in equity and the effort in provisions\u2014has contributed to reinforcing the quality of the balance sheets of Spanish banking entities. <\/p>\n
The Secretary General of the AEB referred to another traditional characteristic of Spanish banking, its high efficiency ratios, which are among the best in international commercial banking. In these times of crisis, “efficiency provides our banks with the competitiveness and agility necessary to better withstand economic adversity,” he stated. <\/p>\n
In this area, he specified that efficiency gains have not only been achieved through the reduction of operating costs, but are the result of significant investments made in technology that have allowed for an improvement in the quality of services offered to an increasingly large and more international customer base.<\/p>\n
Pedro Pablo Villasante also referred to the situation of mistrust created in the financial markets following the Greek public debt crisis. “We find ourselves once again in a situation of extreme tension in the financial markets, where it is increasingly difficult to obtain financing and renew that which is maturing, which is normally done at a higher price and for a shorter term,” he said. <\/p>\n
In his opinion, European authorities should be aware of the great harm that this dysfunction of the wholesale funding markets is causing, which is why they should continue to facilitate alternative financing measures to help effectively alleviate the shortcomings caused by the closure of the markets.<\/p>\n
Regarding the Spanish economy, he indicated that it has also benefited from the generalized recovery expectations existing at the end of 2009 and the beginning of 2010, although its recovery has been slower and less vigorous than that experienced by other countries in its environment.<\/p>\n
For that reason, and in accordance with the recommendations of various international organizations, the measures recently approved by the Government to correct the public deficit should be accompanied by structural reforms that would allow for gains in competitiveness, make the most of the recovery, and expand the growth potential of our economy.<\/p>\n
\u201cSpanish banks remain in profit, with good profitability and without public aid despite the difficulties of the economic environment.\u201d<\/p>\n","protected":false},"featured_media":0,"parent":0,"template":"","etiquetas-prensa":[800,921,926,803],"class_list":["post-38638","notas-de-prensa","type-notas-de-prensa","status-publish","hentry","etiquetas-prensa-aeb","etiquetas-prensa-crisis","etiquetas-prensa-deficit","etiquetas-prensa-spanish-banking"],"yoast_head":"\n