«We must grow but it is key to retain control and the decision center in Euskadi»

2023-09-24 00:33:56

A little less than a year ago he assumed the presidency of Kutxabank and from the first moment he already expressed his intention to make changes. He has done them in the management team and wants to do them in the business, because although the strategy of the past was justified to defend the solvency of the entity, now it needs a new direction. Antón Arriola wants Kutxabank – he warns that “without doing crazy things” – to take on more risks, especially in business financing; He seeks growth because it is the best defense and reiterates his conviction that the bank is better off from the stock market. Retaining ownership is, he points out, the best way to guarantee that the decision center is not relocated as has happened with other large Basque companies. The mood has also changed. In just one year, he and the new CEO have already made four times as many public appearances as their predecessors in eight years. Something change.

– You know that around this bank there is a certain aura of connection with politics. Have you already noticed the influence?

– Believe me, no. What’s more, if Kutxabank has been able to continue being a bank it is because it has been away from political influence and has been well managed.

– Take out the crystal ball. How high do you think interest rates will go?

– The Federal Reserve, in its meeting on Wednesday, has just opted to maintain rates and the European Central Bank has given signs that this could be the last increase. The slowdown in the economy is palpable and that will make another increase more difficult. The unknown now is how long the current level will be maintained. I sense that we will not see declines until the third quarter of 2024.

– You have already entered the deposit war with an offer to customers. The impression that existed is that the banks have delayed the remuneration of savings beyond what is reasonable.

– Each bank has its own speculation but it is a simple market situation, of demand and supply. Deposits are only remunerated when there is a need for liquidity and there was none. There has been a lot of transfer to short-term funds that covered clients’ needs.

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-And do you think that from now on this war between banks will be intense?

– I don’t even think you can call it war. At least not like what could be seen in the past when some large entity bet heavily to increase its market share and due to liquidity needs. Now we live a progression, an adaptation, but without war.

– Are you afraid of the increase in defaults that will occur as a result of the increase in the cost of credit?

– No fear. For now there is a lot of strength and this is because employment remains strong. This means that late payment is minimal. We believe that, even if there are difficulties, families and companies will be able to maintain themselves and that there will be a soft landing.

Deposits

“Accounts are only paid when there is a need for money and there was none”

The rules of the game

– High rates are good for a bank…

– We would be more comfortable with lower rates and controlled inflation.

– Does the recent bank tax have negative effects?

– The economic impact this year, with the income statements that the banks have, is acceptable. The worst thing has been breaking legal security, the rules that we had given ourselves. Banking already had a higher fiscal pressure than the vast majority of activity sectors and profitability today is good, but it has been very low in the last decade.

– From the meeting that the bank presidents recently had with Nadia Calviño, did you draw any conclusions about the continuity of this tax?

– The truth is that no, it’s just going to be evaluated at the end of the year. We hope that the criterion that it was a temporary tax is maintained.

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– I have to ask you the now traditional dilemma of the independence of Kutxabank. You know, the options of going public, bringing in partners…

– Control is essential to avoid the relocation of the decision center, which can lead to the disappearance of a tractor from our economy. Even the disappearance of options so that our young people can aspire to well-paid jobs. The best way to ensure that is to own a majority of the shares.

– That greatly limits any corporate merger operation.

– Definitely. But it is also true that merger operations occur when things go badly for someone and we are not exactly in that situation now. We must grow but it is key to retain control and the decision center in Euskadi. I think it is the best for this society.

Mergers

«I don’t think there are many options. It’s easier when someone is doing badly.”

Goal, grow

– Beyond the formalities, let’s assume that Kutxabank is owned by all Basques and that today it has a market value similar to the accounting value, about 6.5 billion euros. Is Kutxabank the best place where Basques can allocate that investment?

– It is very important for the Basque Country to have a financial engine like this. Beyond business motivations, that is why it is important that we are more present in the activities of companies, because they create wealth for society.

– They said they want to grow…

– Yes, but little by little, without doing crazy things.

– Where and how?

– On the geographical side in areas such as Madrid, Barcelona, ​​Valencia and the Seville-Málaga axis. In activity segments, in insurance, where we have already had a very positive evolution and especially in business activity. In the individual business we have a market share of over 30% but in companies we do not reach 15%. There is room there. In more global terms, the time has come to relax the risk criteria a little, in moderation. It was logical to be very conservative, as has been done in recent years, because the priority was to guarantee the bank’s solvency. We now have room to be more flexible.

– Since you are talking about companies, don’t you think that the role of the entrepreneur has lost social recognition in Euskadi?

– It is like that and it is the lament of businessmen. I think it is unfair because its role in generating wealth for the entire society is key. The living standards we have are precisely due to the business class that has pushed so much. There is a reputation problem that must be solved and I believe that it is up to companies to better transmit and communicate our social role.

– The current president of CaixaBank, José Ignacio Goirigolzarri, said that the banking reputation problem is a responsibility of the banks themselves, which are obliged to do things well. Maybe not like in the past.

– It’s true, but I think the righteous pay for sinners. The banks that are active today are precisely those that did things well, those that did not fall into adventures.