The executive affirms that companies “lead” the recovery in Spain and calls for reforms so that the country can move to the “next level”
The president of the Santander, Ana Botinhas defended this Friday that the banks are in a “situation solid, much more than 15 years ago“, when the Global Financial Crisis of the period 2008-2014 started. “In the case of European banks, we are subject to the strictest regulation and supervision in the world. As the European Central Bank has said, European banking is solid, and it has a comfortable capital and liquidity position with which to deal with bouts of volatility caused by specific problems in specific entities”, he maintained, referring to the recent falls of the Silicon Valley Bank in the United States and Credit Suisse in Switzerland.
During his group’s annual shareholders’ meeting, Botín praised the “quick response” given by the US and Swiss authorities and the ECB, for having been “fundamental in reestablishing the appropriate conditions and restore confidence“. At the time, he has argued that the recent banking storm is a “great opportunity” for complete the union of the capital market and the European banking union, with the creation of the community deposit guarantee fund. “This would be the best response to the challenges in Europe, which will contribute to generating greater confidence, and would be a great basis for attracting the necessary investment for growth”, she has defended.
The executive has also taken the opportunity to put duties to the Government and implicitly make him ugly in his recent clashes with some businessmen. “The recovery in Spain it is thanks to leadership of millions of freelancers, SMEs and companies, who strive every day to improve their companies; thanks also to the improvement in tourism, a good level of savings for companies and families, and the focus on reducing energy dependence. To take our country to the next level, we need structural reforms that allow us to resume convergence with Europe in terms of income, well-being and quality of life”, he assured.
Well prepared
The banker, likewise, has defended that Santander is “very well prepared” to deal with the current turmoil. Contrary to the two fallen entities, he has reported, the 80% of deposits of the bank come from “millions” of individuals and companies, and most are backed by guarantee funds, which gives it a base of financing “much more stable and resilient in times of crisis”. The group, he continued, is “very diversified both geographically and in business,” which “proved to be a competitive advantage critical during the 2008 financial crisis, and still is now,” while having a “unique combination of local and global scale.
Along these lines, he has revealed that the entity has close to 200,000 million of euros deposited in the central banks, which are equivalent to 20% of your deposits. Also that 80% of these deposits are from retail clients and that in their main markets (Spain, United Kingdom and United States) around the 70% are insured for guarantee funds. He has also stated that his sovereign debt portfolio “the interest risk of the balance is balanced, it is small and diversifiedwith an average duration of 4 years, and is relatively new”, as well as that its credit risk is “low, predictable and diversified”.
traditional model
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“Situations such as those experienced by European and American banks in recent weeks remind us of the Great value that underlies the traditional models of bank management, such as that of Santander: prudence in risk control, solvency and conservative management of liquidity levels. Santander has successfully faced profound changes and challenges, something that we will do again now thanks to a strategy that highlights our strengths. We are a easy to understand bankwith a focus on commercial banking”, maintained Botín.
The executive has also given some clues about the results that the bank is getting in the first trimester to give confidence to investors. Thus, he has pointed out that he anticipates an improvement in the cost effectiveness on tangible capital from 13.4% to around 14% (15% but for the ‘tax’ on government banks), maintain the capital at 12% and the ratio of liquidity CSF in 145%. It is also gaining more than one million new customers, with growth of credit 4%, of the deposits of 6% and income above 10%. For all these reasons, it has maintained the targets set for the year, despite having announced them before the recent banking storm.