2023-07-27 15:10:42
Héctor Grisi, the CEO of Banco Santander, has asked the Government to finally result from the general elections on July 23 to promote economic growth and private investment, and to establish “clear rules”.
In the presentation of results for the first half of 2023, when Banco Santander achieved 5,241 million euros (which represents an advance of 7% compared to the data for the same period of 2022), Grisi commented that it is “very premature” to comment on the current Spanish political situation, as there was no “clear result” in the last elections, for which reason the entity chaired by Ana Botin it will also continue financing families and businesses, and helping the country’s economic growth.
The CEO of Santander Bank He has also explained that asking for “clear rules” from the new government does not imply that there is no legal certainty in Spain. In this sense, he has stated that “The more boring things are, the better for us, but we have not said that there is no legal certainty.”
When asked about the evolution of Banco Santander’s business in Spain, an area that has become the first geographic market by profit for Grupo Santander (which had not happened since 2009), Grisi indicated that the dynamics in the country are being ” good”, although the same happens in other geographies where the entity operates.
Héctor Grisi has reported that the credit business in Spain is shrinking, “not because we do not want to give credit, but because the demand for credit is falling due to the rise in interest rates.” The demand for mortgage credit is receding, but also the ‘stock’ of these loans, with early repayments five times higher than those observed up to now.
The financial director of Banco Santander, José García Cantera, has indicated in this regard that the average amortization in the first half of 2022 was 60 million euros, while the first quarter of this year increased to 150 million, and now stands between 250 and 300 million euros per month.
García Cantera has indicated that economic inertia in Spain is normally positive, and that Banco Santander foresees an advance in income from tourism activity in 2023.
Regarding the temporary tax on banks, Grisi recalled that a third of what Banco Santander earns is allocated to reinvestment in the business itself, another third to remunerate the shareholder, and another third to pay taxes, for which reason he believes that the entity already rewards society “to the extent that we have to”.
The CEO of Banco Santander considers that the tax is “discriminatory, it penalizes the sector, which already pays a lot of taxes”, and that it does not help the Spanish economy.
When asked about the return to remuneration of deposits, Héctor Grisi pointed out that savings are being remunerated through products other than deposits, such as savings funds or insurance, as well as the cost of loans for customers in Spain would be below the European average.
Regarding the stress tests of the European Banking Authority (EBA), whose conclusions will be announced this Friday, both Grisi and Cantera have trusted that Banco Santander will obtain “good results”. The financial director of Banco Santander has stressed that the entity “is the bank that destroys less capital in these tests among European banks and we expect a similar result.”
Regarding the business in the United States, where profit fell by 39% in the first half of this year, standing at 667 million euros, and in Brazil, where it fell by 40.2%, to 823 million euros. euros, Héctor Grisi has detailed that these are two markets that concentrate the credit portfolios with the highest risk and a great negative sensitivity to increases in interest rates.
With respect to Brazil, Santander Bank estimates that in August interest rates will begin to fall in the South American country, and the entity could then take advantage of it to re-enter the market in a “somewhat more aggressive” way, with which it expects a better result in the second half of 2023.
In the United States, Héctor Grisi forecasts at least two more interest rate hikes before the end of the year, of 25 basis points each. Banco Santander is normalizing its provisions in the country, with higher provisions for insolvencies, after reducing them during the Covid-19 pandemic. In any case, the entity chaired by Ana Botín still expects worse numbers for the second semester in the US due to cyclical aspects.
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