How is each Spanish bank prepared to deal with a flight of deposits or a crisis that jeopardizes its solvency? To this question, which has been recurring since the fall of Silicon Valley Bank (SVB) and Credit Suisse two weeks ago, the Bank of Spain responds in a generic way, defending the solvency of the entities without going into detail. However, the Alvarez firm
CaixaBank and Ibercaja are the two Spanish banks with the highest liquidity ratios, which would allow them to face a possible flight of deposits or any incident that momentarily put their solvency at risk for longer. This aspect has been identified by the Bank of Spain as one of the elements of special supervision this year after the recent banking crisis in Europe.
The variable that is measured is the LCR, which consists of the capacity of an entity to respond during 30 days to a continuous outflow of liquidity. 100% of LCR is equivalent to reserves for a month, and all Spanish banks, according to the Alvarez report
The leader in liquidity is Ibercaja, with an LCR of 306%, which allows it to respond to three months of drainage. It is ahead of CaixaBank, which has 284.2%. Unicaja, with 284%, and Sabadell, with 266%, are in the following positions, ahead of Abanca, KutxaBank, Bankinter, BBVA and Santander.
Another of the variables that has gained interest these days is the percentage of loans compared to deposits of each bank. Bankinter is the one with the most coverage in this area, with 98.8%, compared to 96% for Kutxabank, 94% for Sabadell and 96% for CaixaBank.
In doubtful credits, the one that comes out better off is Kutxabank, with barely 1.4% of the total. Ibercaja has a ratio of 1.6%; Abanca, 2.1%; Bankinter, 2.4%; CaixaBank, 2.9%; Santander, 3.3%; Unicaja, 3.5%; BBVA, 3.9%, and Sabadell 4.2%
Fernando de la Mora, one of the authors of the report, considers that, given the need to have resources, “it is now likely that banks will begin to revise deposit remuneration upwards in order to have a good base” .
Alvarez
The old savings banks are the ones with the highest percentage of individual depositors, which protects them from a possible flight of depositors, which is accelerated when there are fewer clients with higher average savings.
However, BBVA and Santander are the two banks that would have more flexibility when it comes to responding to depositors, since they could amortize their investments more quickly.
The bank with the best quality capital ratio is, by far, Kutxabank. The rest are above 12%, except Abanca, with 11.9%. In this variable, which measures banks’ anti-crisis buffer against solvency problems, Spanish banks are below European ones.
Bank solvency, the report indicates, has experienced a decrease to levels of 12.62%, mainly due to the payment of dividends and share repurchase programs. In Europe, the average is 15%.
If other variables such as growth, efficiency and profitability are added, the Alvarez classification
