Those responsible for Banco Sabadell do not share the scariest predictions and They deny that the Spanish economy could fall into recession It will get it under control next year as a result of inflation and interest rate hikes. Also, if they stick to what they see in their office, they provide from the Alicante-based entity: they haven’t even begun to detect the drop in activity Demand for mortgages and other types of loans remains high, as many predicted after the summer and in both September and October.
This was stated by the CEO of the business this Thursday, César González-Buenoand finance director Leopoldo Alvear during the presentation of the results for the bank’s closed third quarter 709 million euro profit, 92% more More than in the same period of 2021. In his view, an increase in profit, does not justify the new tax Compared to what Nadia Calviño, Vice President, stated a few hours ago, to the banking that the Government wants to implement, because they insist that the industry has already paid a lot of taxes and is still not reaching the cost of capital, i.e. profitability. demanding markets.
“At the moment We don’t see any signs of weakness in the economy. Inflation clearly raises questions about the future, but we can only see the results we have achieved. And the truth is that when we left in the summer we expected a dip in activity after the holidays, but not in September or October,” he insisted, reminding that there is a recession for next year and all national and international organizations are targeting. A growth of between 1% and 2% in Spanish GDP.
Along the same lines, Sabadell’s finance director loss of purchasing powerbut what cannot be compared with the effects of a sharp increase in unemployment and for now, employment indicators remain solid.
In any case, they view positively what is possible from the bank. measures to help the most vulnerable groups It has been negotiated by the government and industry employers, but they believe there will be very few customers who might have problems in their case. First of all, as González-Bueno explains, more than half of the bank’s mortgage portfolio at a fixed rateand most of the other half, they are already over ten years oldtherefore, pending depreciation capital is lower and they will be less aware of the impact of a rate hike.
Despite this, the manager insisted that “what concerns organizations is what customers can pay”, so they will seek necessary solutions with these customers.
Not surprisingly, Sabadell’s executives also referred to the new provisional bank tax currently being processed in Congress, which provides a 4.8% tax rate on the commissions and interest margin charged by corporations. A measure to be applied to banks with a turnover of over 800 million for these concepts in 2019.
Abnormality
Contrary to what Nadia Calviño argued in Brussels, Sabadell’s CEO does not believe that the increase in profits in the industry justifies this tax. Thus, as he did in his presentation of previous results, he already made organizations pay higher taxes than most industries, and he gave Sabadell’s example. paid more than 800 million taxes last yearWhen last earning was 530 million. “Paying more taxes than you earn is an anomaly and it will increase with the new tax,” he said.
Leopoldo Alvear, for his part, cost effectiveness of the bank 8% on ROTE basis– It is still far from the cost of capital, that is, the costs that investors demand in the markets for investing, which exceeds two digits. A situation that, as he himself recalls, assumes greater difficulty for organizations in financing themselves in the markets and thus lending to their customers. For this reason, he emphasized that the abnormal situation has occurred with negative rates and very low performance of the financial sector in recent years.
In any case, César González-Bueno pointed out that the tax should be temporary and, above all, the tax should be respected, as everything would be if approved. principle of “impartiality” so as not to affect the competition. Thus he claimed applies equally to all assets Consideration of more criteria operating in the Spanish market, as well as commission and interest income.
On the other hand, they do not foresee a short-term decline from Sabadell. “passive warfare”. As those in charge point out, it’s a bidding war between entities to get customer savings by offering higher fees, as most banks currently have the liquidity to spare.
Fees
Regarding wage increases or possible compensation for the workforce to mitigate the impact of inflation, González-Bueno said, Bonus paid to employees of the British subsidiaryTSB is a reality constrained by the peculiarities of the UK labor market and Nothing similar is planned in Spain. In this sense, he called for moderation and pointed out that an excessive increase could nullify the effect of increasing profitability provided by the recent workforce cuts. bank.