BY UE STUDIO

Updated Wednesday, February 1, 2023-16:06

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According to the latest reports from the Bank of Spain, the Spanish banking sector starts from a relatively favorable situation.

The factors are varied, but they are summarized in a lower delinquency ratio and an improvement in profitability, which, however, in some cases still does not exceed the cost of capital.

The sector finds itself in a position of greater solvency to face and help face the different macroeconomic vicissitudes that our country faces.

The figures provided by this institution speak of a 12.8% reduction in doubtful credit, recovering the figures prior to the pandemic and standing at 3.8% (June 2022).

Solvency, for its part, stood at 12.9% on that same date, 70 basis points above pre-pandemic levels (12.7%).

A base that is allowing the banking sector to continue with a willingness to serve that makes it capable of facing the volatile economic situations that the world economic system has suffered, and therefore the population and society as a whole, especially influenced by Covid19. and its consequences.

Thus, during the crisis derived from the pandemic, banks, thanks to their presence throughout the national territory, the capillarity of their branch network and online channels, customer knowledge and adequate risk management, contributed decisively in the maintenance of thousands of jobs and the survival of companies and businesses.

This was possible thanks to public-private collaboration in the form of ICO credits, with very favorable conditions to face a reduction in income, especially from SMEs.

In 2020, the year of the outbreak of the pandemic that led to a three-month lockdown, companies and the self-employed received around 140,000 million euros of financing through this line of guarantees,

The economy, without having been able to fully recover from the incidence of Covid19, found itself barely a year ago with the consequences of the first conflict on European soil since World War II: Russia's invasion of Ukraine.

In this context, the banking sector has deployed first-impact measures to provide humanitarian aid, alleviate financial costs for certain companies and individuals, and ensure rapid inclusion for those displaced by the war.

The last one is designed for those families who may find it difficult to meet their expenses as a result of high inflation and the rise in the energy bill and has consisted of the joint signing of entities and the Government of the mortgage measures protocol, which has led to the update of the Code of Good Practices to help them in their financial situation.

financial inclusion

The pandemic has accelerated the emergence of new technologies and new ways of interacting economically.

The emergence of fintechs and technological development has changed the existing relationship between client and financial institution.

However, the main Spanish banks have wanted to join this new digital vision, without forgetting to remain at the service of society and especially the most vulnerable groups.

Thus, the Spanish banking sector maintains a firm commitment to inclusion with the elderly and with people who live in rural areas.

A commitment that is reflected in the agreement that the sector has signed with the Ministry of Economy to guarantee, among other things, that there is at least one point of access to face-to-face services in the 243 municipalities with more than 500 inhabitants that do not have any. .

Double edge

On December 29, the "bank tax" came into force, which the Government applies as a measure that contributes to the Spanish tax system and redistributes the supposed extraordinary profits of the sector.

According to the Spanish Banking Association (AEB), this tax "is a mistake" since it can affect the ability to distribute credit, essential to underpin economic recovery.

In addition, banking is the sector to which the most tax burdens are applied, with a rate of 30%, 5 percentage points above that applied to other business sectors (25%).

As the experts explain, the interest rate rise is a monetary policy decision adopted by the central banks, the banks being the transmitters of said policy.


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