Spanish banks are posting record profits in step with Spain’s economy, and with interest rates that stayed higher than previously expected at the start of the year. The European Central Bank has reduced the cost of money only once in 2024 to 4.25 percent, far above the 0 percent level seen from 2016 to 2022. Analysts expect a further, at least one more, cut in the autumn, though the impact on bank earnings may take time as cheaper lending filters through to portfolios and funding. [Attribution: Central Bank and market commentary, 2024]
The six banks that comprise the Ibex 35 Banco Santander, BBVA, Caixabank, Banco Sabadell, Bankinter, and Unicaja achieved a joint first half profit of 15.287 billion euros, up 23.42 percent from the same period a year earlier. In the first half of 2023, profits reached 12.386 billion euros, representing a 20 percent year‑over‑year rise. [Attribution: Ibex 35 bank results, 2024]
Many bank executives see the growth in lending margins nearing a peak. CaixaBank chief executive Gonzalo Gortázar characterized the rise in net interest margin as an effect that has reached its end. He indicated the peak has been reached, even though the full year will show year‑over‑year growth between 7 and 10 percent. He noted that several factors influence the margin beyond mortgage rate cuts, including other loan book dynamics and balance sheet funding. [Attribution: CaixaBank earnings conference, 2024]
The leading bank by assets, Banco Santander, closed the semester with a profit of 6.059 billion euros, up 16 percent from the prior year. The growth was driven by a strong increase in net interest margin across global activities and regions, supported by a four‑million‑customer lift and tight cost control that more than offset higher provisions. [Attribution: Santander interim results, 2024]
The institution led by Ana Patricia Botín also boosted gross margin by 10 percent to 31.050 billion and the net interest margin by 12 percent to 23.457 billion. At the end of the semester Santander reported a tangible return on equity (ROTE) of 15.9 percent, with capital adequacy CET1 fully loaded at 12.5 percent, modestly higher than a year earlier. The non‑performing loan rate improved to 3.02 percent, and the risk cost stood at 1.21 percent. [Attribution: Santander financials, 2024]
In the spotlight is the BBVA‑Banco Sabadell takeover bid. BBVA posted a net attributable profit of 4.994 billion euros for January through June, up 29 percent from 2023 and 37 percent in constant euros. The group, renowned for its profitability among peers with a ROTE around 20 percent, continues to pursue Sabadell. The period saw a net interest income of 12.993 billion euros, up 13.9 percent, and commissions rising 31.2 percent to 3.842 billion euros. Overall, gross margin reached 17.446 billion euros, up 23.3 percent from the prior year. [Attribution: BBVA earnings, 2024]
CaixaBank ended the semester with a 2.675 billion euro profit, up 25.2 percent. Net interest income was 5.572 billion, up 20.5 percent, mientras ingresos por servicios rose 4.4 percent to 2.449 billion. The gross margin stood at 7.701 billion, up 15.4 percent, while recurring administrative and amortization costs reached 3.028 billion, lifting operating margin by 23.8 percent to 4.673 billion. [Attribution: CaixaBank results, 2024]
The Banco Sabadell group increased its profits by 40.3 percent to 791 million euros. The gross margin rose 9 percent to 3.061 billion, and the net interest margin grew 9.8 percent to 2.493 billion, helped by a 3.18 percent rise in the loan margin. Commissions fell 3.3 percent to 674 million. The bank’s fully loaded CET1 ratio reached 13.48 percent, up 18 basis points in the quarter and 27 basis points from the end of 2023, after the dividend payout increase from 50 to 60 percent. The return on tangible equity (ROTE) ended June at 13.1 percent, up sharply year over year. [Attribution: Sabadell results, 2024]
Bankinter, the second most profitable in the Ibex 35, earned 473.5 million euros in the first half, up 13.3 percent from the same period in 2023. Net interest income reached 1.160,3 billion, while gross margin clocked 1.410,5 billion, a 10.4 percent increase, supported by stronger commissions. Bankinter’s ROTE stood at 18.8 percent at the semester end, and the CET1 fully loaded ratio was 12.4 percent, leaving a cushion of about 4.59 percentage points above the regulatory floor. The gross margin and the overall profitability show the bank’s ability to monetize its diversified offerings. [Attribution: Bankinter results, 2024]
The final bank, Unicaja, doubled its gains, rising 98.7 percent to 294 million euros. Total income, or gross margin, grew 21.1 percent to 1.006 billion euros, with net interest income at 774 million euros, up 25.7 percent. The return on tangible equity climbed to 7.0 percent for the semester, and Unicaja raised its 2024 ROTE target from 9 to 10 percent. The fully loaded CET1 ratio rose to 15.1 percent, making it the most solvent of the six Ibex 35 banks. This ratio reflects the bank’s immediate capacity to absorb shocks based on its balance sheet assets. [Attribution: Unicaja results, 2024]