The five largest banks listed in Spain, Santander, BBVA, CaixaBank, Sabadell and Bankinter, have been announcing throughout this week and without exception a record profit in 2023, which accumulates a total of 26,093 million. The figure is 27% higher than the previous year and is accompanied by the message that, if forecasts are met, it will be exceeded again in the current year.
The big catalyst for the gains has been interest rate hikes, which have made loans more expensive at a faster rate than the revaluation of deposits. The raw material, money, is worth more, and banks had no need to ask customers for it. They have high liquidity following the expansionary programs of the ECB and, in addition, they have quality capital that exceeds regulatory requirements.
Added to this dynamic are the advances in efficiency and the good business results in Spain, despite the extraordinary banking tax that the Spanish Government wants to make permanent. This country was the one that brought the most profit to Santander’s accounts, 2,371 million, 52% more. The figure also reached a record level of 2,755 million, 65% more, in BBVA’s results, despite the decline in mortgage lending and the increase in arrears.
Spain is also, of course, the major source of earnings for CaixaBank, the first retail bank in the domestic market, which as a whole earned 4,816 million euros last year, a 54% increase.
The upswing in Spanish business occurred despite the banking tax. Of the three main entities, CaixaBank is the one that pays the most: 373 million last year and 500 million predictably this year. Santander dedicated 320 million to the tax and will pay 338 million more in 2024, while BBVA will go from paying 215 million in 2023 to 285 million in the current year. Together with Sabadell and Bankinter, the big five put the impact of the levy at 1,143 million last year and predict that the figure will reach 1,415 million this year.
The presidents of the banks maintain their criticism of the tax, which the entities have resorted to in the courts. The president of Santander, Ana BotÃn, said that “no country in the world has an extraordinary tax beyond 2024” and regretted that banks are “discriminated against” other sectors. For BBVA’s Carlos Torres, it is “counterproductive for the economy”, while Bankinter’s CEO, Dolores Dancausa, described it as “unfair” and “discriminatory”.
Of all the banks, the one that won the most last year was once again Santander, with 11,076 million euros, 15% more. The bank, which has reorganized the business in large global areas, expects to exceed 12 billion by 2024.
BBVA earned 8,019 million, 26% more, thanks not only to Spain, but also to Mexico, which has become the most interesting market to invest its surplus capital, which stands at 2,400 million euros.
The president of CaixaBank, José Ignacio Goirigolzarri, described the current interest rate environment as “normalization” and highlighted the bank’s ability to gain “scale and competitive position” after the 2021 merger with Bankia.
Banco Sabadell increased its profit by 55%, up to 1,332 million euros, of which almost 15% comes from the British subsidiary TSB, which contributed 195 million and in which an efficiency plan was applied on which The bank did not offer details. Bankinter earned 845 million euros, 51% more.
The banks agree on the forecasts that this year the ECB will start to lower interest rates. The CEO of CaixaBank, Gonzalo Gortázar, estimates that mortgage payments will drop by an average of 20 euros per month, although BotÃn assured that the relief will be greater, up to 70 euros.
