The CEO of ING Spain, Ignacio Juliá, has been holding positions of different responsibility at the bank since 1999 and knows both the entity and the sector well. His vision of the economic moment consists of a mixture of optimism and prudence in which ING, which has become the fifth entity in Spain thanks to its digital agility, will continue to gain market share.
In just one week the Redsys payment system has gone down twice. There is a problem?
We always remember technology departments when they fail, but we should turn it around. The systems work and we have availability levels that are close to one hundred percent. What is very relevant is that it solves quickly, which is what happened. Redsys was able to fix it quickly enough.
We are going to a cashless world
The digitalization of payments is on the rise and we believe it is good and healthy because it is safer and there is no activity in B. However, payment alternatives must always be provided, with cash access throughout the country. I think that cash will continue for a long time, even if it is for extraordinary cases.
How is ING doing?
In 2023 the anomaly of negative rates has been broken. Before, banks only made money with half of their balance sheet and now they do so with both sides. We see a normalization of results, which are rising, and ING is no exception.
What will the results be like?
Last year in Spain we had a record in customer growth, in their satisfaction and that of employees, and also in results, with 303 million euros. And this year is going to be better in all four parameters. We are happy because we are doing very well in a fairly complex environment in which we have to be cautious.
What forecast do you have about interest rates?
The market consensus is that we have already seen an increase and that throughout 2024 we will begin to see some decreases. It seems that we have reached the peak, and we will begin to notice part of the effects of the rate hike. In Spain, growth will continue to be positive, but less accelerated, and hence we have to be cautious.
Should we be prepared for an increase in delinquencies?
In mortgages, which is our largest portfolio, we are at a rate of 0.5%, when the sector is at 2.71%. Yes we are seeing that it is rising, but it is being contained and it is doing much less than we expected. The great news in Spain and Europe is also that unemployment is being contained. As long as the unemployment rate does not increase, the economy in general and the banks will do well. It is what makes the difference in default.
What is the reason for this favorable employment behavior?
It is a phenomenon that is happening throughout Europe. In Spain, the economy is doing well and we are achieving what was expected at the beginning of the year. Tourism has been going quite well this year and we are growing more than other European countries.
Does ING also do better in Spain than in other countries?
The group's results have been very positive. ING is doing very well and, in the particular case of Spain, last year was one of the fastest growing. In 2022 we gain 256,000 customers and this year we are going to end up a little higher, closer to 300,000 than 250,000. In retail banking, we are the fifth bank in Spain. By bizum transactions, we are fourth and, by number of accounts, fifth.
Is the decline in credit granting worrying?
The entire market is appreciating it. Demand is falling and there is now a moment of impasse, but there is no collapse in real estate prices and growth is expected in the Spanish market.
Are your clients also taking advantage to pay off the mortgage?
Since the middle of last year, cancellations have increased because the population has been saving with very low rates. By raising rates now, the fee increases and it is preferred to amortize. It is a general trend in the market.
ING has escaped the new banking tax. What do you think of the measure agreed between PSOE and Sumar to extend it over time?
We are members of the Spanish Banking Association (AEB) and we have exactly the same opinion: we do not believe that creating a specific tax for a sector is the vehicle to solve the problem at the national level. It does not help to provide more credit and that has an impact on the economy. I don't think it is the best formula to tackle a crisis. With the criteria decided a year ago, ING will be left out of the tax, but if the rule is reformed again, we will have to see the text to understand how it looks.
What do you think of the Government's idea of extending protection to mortgage holders in trouble to incomes of up to 38,000 euros?
When we see the impact of the code of good practices, what we see is that demand is going down. You have to understand the measures that are being taken so that they have a significant impact on clients and the economy.
Are you already refinancing more mortgage debt due to customer difficulties?
In the end, the bank does everything possible so that the client can continue paying their debts, and refinancing and grouping debts is part of the banking tools before getting into real problems. It is part of our responsibility and our work. All entities do it because we want clients to do well.
When will banks remunerate deposits?
We have the opposite tendency. We wanted to be faithful to the promise when launching the bank: remunerate savings. We have already raised the Orange Account six times, four of them in 2023, and we are already at 1.5%. We have added alternatives in deposits and monetary funds. Of course, we have been passing on to our clients the increases we have seen in the markets.
Is there little competition that discourages competition between banks to remunerate savings?
I think there is healthy competition. In addition to traditional banks, in which there has been concentration, there are neobanks and foreign banks. They are many and very good.
Is there risk around banks?
Fortunately, in recent years homework has been done and the banking system has been greatly strengthened in both Europe and Spain. The banks are now highly capitalized and we have very healthy liquidity ratios. We are prepared for difficult events, although we must be prudent and capable of managing very dynamic environments.
