Five major Spanish banks, Santander, BBVA, Caixabank, Bankinter and Sabadell, this week presented their 2023 annual results with record profits: 26 billion 088 million euros. increased by 25.96% compared to the previous year.
This increase in profits is largely due to the European Central Bank’s (ECB) increase in interest rates, which widens banks’ interest margins on lending and makes the loans already granted more expensive. rates like mortgages. These benefits are also Extraordinary tax from the government to the financial sectorThis cost them more than $1.1 billion, analysts estimate. According to the organizations’ estimates, this payment will reach 1.4 billion in 2024.
Moreover, the heads of these organizations have shown that they are fully confident that, rather than being a particularly exceptional year, 2024 will be even better and that they will be able to set new records in terms of both results and profitability.
In the absence of results that Unicaja will publish this Tuesday, Spanish banks are in a sweet spot; because the interest margin in 2023 reached 83,400.1 million, which is 19.8% more than in 2022. This figure increased by 44.1% to 26,969.1 million. Moreover, financial institutions have only slightly increased the fee paid for deposits: European banks currently pay 3% for deposits, while Spanish banks keep this rate at 2.31%.
Another important factor in the development of banking is that despite the increase in interest rates, the default rate increased only by an average of 4 basis points. Banco Sabadell was the institution that increased its debt the most, from 3.41% to 3.52%, but other institutions such as Bankinter estimate the rate at 2.11%.
Sabadell that increased its profits the most
In terms of profit, Banco Sabadell was the institution that increased its profit the most, with an increase of 55.10 percent to 1 billion 332 million euros, followed by Caixabank, which increased by 53.9 percent to 4 billion 816 million euros, and Bankinter, which increased by 50.89 percent to 845 million euros. The Spanish bank with the highest profit was Banco Santander with 11 billion 76 million euros, 15.31 percent more profit. BBVA follows it with a profit of 8 billion 19 million, an increase of 26.10%. The five organizations’ business in Spain increased by 52.8% to 11,428 million and represents almost half of the sector’s profits.
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A criterion that investors follow closely is Earnings per share (EPS) this is also increasing across the five major national financial institutions. Banco Sabadell stands out in this field with an increase of 76.9% to 0.23 euros.
The same thing happens in this case: return on tangible equity (ROTE) It has been repeatedly criticized by stock market analysts and investors for its weakness in recent years. While this percentage increased by an average of 3.72 points, Bankinter ranks first in the financial profitability ranking with 18.15%.