The numbers may not be reflecting the reality of the banks' financial situation. That was the message that Luis de Guindos, vice president of the European Central Bank and former Spanish Minister of Economy, sent this Monday to the main executives of the Spanish financial sector who gathered at the XIV Financial Meeting of the sector organized by KPMG and the newspaper Expansión in Madrid.
De Guindos has insisted on conveying the "mirage" that the current income of financial entities may represent and has focused on the uncertainty about the future, which continues to be one of the challenges that Spanish banks must take into account despite the good results. that the European Banking Union, which is now 10 years old, has shown in the euro zone that it has been able to avoid the financial problems it has had in the last year.
The financier has listed the main risk factors facing the sector such as the slowdown in credit, financing costs, rising defaults or provisions of entities. “There are doubts about the intensity of the transition. of the tightening of monetary conditions to economic activity,” commented the vice president of the ECB. Although he has recognized that the markets are already pricing in a scenario of high rates for a long period of time.
Among the risks that could derail the current financial situation of banking entities would be a more abrupt economic adjustment than expected, and as a warning a significant correction in real estate funds has been pointed out.
De Guindos has once again insisted on the risk of an increase in defaults in the sector, although the CEO of BBVA, Onur Genç, does not consider that there is a risk in this area.
Despite this whole series of risks, De Guindos has insisted once again on demanding that Spanish entities increase the remuneration of deposits, to which the recipients of this message do not seem very inclined. “We have always been aware of our clients. Spanish banks are the ones that give the cheapest mortgages in all of Europe. Rates are paid below inflation and that does not happen in other places,” said Héctor Grisi.
