The president of Santander, Ana Botín, has replied to the Minister of Labor and Vice President of the Government, Yolanda Díaz, that mortgages in Spain are “among the most competitive” in Europe and that any measure to freeze their increases could lead to “a culture of non-payment”.
Botín made these considerations during the press conference to present Santander’s annual results, in response to the proposal made yesterday by Díaz to freeze the rises in mortgages, made shortly after BBVA announced a record profit. Santander has also announced today historic profits of 9,605 million euros, of which 1,560 million correspond to Spain.
“Mortgages are below countries like Germany, and 65% are at fixed rates,” said the president of Santander, before saying that in Spain home purchases are being financed at 2.9%, “while that the risk rate is at 3.5%”. “In the case of mortgages, it would be a mistake to set conditions that expel and generate a culture of non-payment,” as happened in Mexico “for fifteen years.”
Botín has ensured that “the best way to progress is to create jobs”. “The issue of unemployment is the responsibility of the Government and the best way to tackle it is by encouraging investment”, he has assured to assess the unemployment figures known today, with 71,000 more unemployed in January.
The president of Santander has also announced that the bank will raise the salaries of its entire staff by 4.5%. The AEB banking association has already agreed with the unions on an increase in this proportion, but there were doubts as to whether, in the case of Santander, the measure would be extended to all workers.
Regarding the criticism of the Prime Minister, Pedro Sánchez, of big businessmen, he pointed out that “countries progress when they reach consensus and collaborate and listen.” “We have a relationship with the governments of all countries and we are going to continue in this line, we are always prepared to help.”
Botín has estimated the annual impact of the new tax on banking and energy companies on Santander’s accounts at between 220 and 230 million euros and has alluded to the “fiduciary obligation” of the entity to appeal the tax. Spain, he stated, “is the only market in which capital costs are not covered.”
“I absolutely agree that governments have to collect”, but “if more taxes are paid, you give less credit, and we dedicate a third of the profit to paying taxes”, he assured.
For Botín, the ECB’s rate hike process is part of the “normalization” of the financial system in the euro area, in which the question of what is the level of interest rates that economies can bear without getting into a significant recession”. The interest rate rises explain the strong increase in the annual results of the bank’s interest margins, which expects to add between 2,500 and 3,000 million additional euros this year for this concept.
The president of Santander also assured that “inflation has not been defeated” and is “the cancer that must be stopped.” “It could have peaked in many countries, but it persists and hurts the most vulnerable above all,” she said.
Interest rates rise, but for the moment banks do not reward savings through deposits. “Of course, at some point we are going to remunerate the savings,” but “it will depend on the competition, which is what determines it.” “Between deposits and loans, the margin has to be sustainable over time, and the margins in Spain continue to be among the lowest.”
The bank will distribute almost 4,000 million euros in dividends and share buybacks. The percentage of profits that will go to shareholders will be around 40%, below other banks such as BBVA, Santander or Bankinter. “The board’s intention is to raise it when possible,” he said.
