The excessive degree of dependence on a single source of financing constitutes an element of vulnerability for companies. For this reason, the CEO of Banca March, José Luis Acea, defends the need to have diversified, flexible, demanding and stable financing to improve management and reinforce security. The possibilities that the financial market currently offers were analyzed this week in a conference organized by Banca March itself, together with La Vanguardia, on "Alternative financing for the company and wealth advice for the entrepreneur."
Currently, according to José Luis Acea, there is a growing demand from companies to finance themselves in alternative markets. This coincides with the fact that there is an abundance of capital and multiple possibilities of obtaining it. “The key to success – he said – is knowing where it is and who is willing to contribute it for business financing.” In this sense, he highlighted that Banca March is a reliable operator, with almost a hundred years of history, which works with a long-term vision, maximum professionalism and trust earned day by day. “Banking – he said – today must be a good financial provider and this is what we are. We have no conflicts of interest in investment options and this allows us to always offer the best alternatives.” He pointed out that Banca March, today, is the first entity in short-term issues in Spain, with participation in more than 58 programs, which have accounted for 48% of this market in the first months of the year.
José Luis Acea also believes that sophisticated financial products must be affordable for all types of companies, family businesses, their managers and their professionals. To achieve this, however, more professional and quality asset advice for the businessman is increasingly necessary. In this regard, he cited that in Spain only 30% of savings are managed and advised in market assets compared to 70% in the rest of the European Union.
The CEO of Banca March presented his entity to the businessmen and executives attending the event as a bank of relationships, closeness and service, the only bank with 100% family capital since its origins in Spain, with 50,000 million euros of business volume, a capital ratio of 20% – the highest in Spanish banking –, a default rate of 1.30%, the lowest in the banking sector, and a network of 115 branches in Spain and Luxembourg. He also highlighted that the entity's issues have an A2 rating from Moody's, which is also the highest in Spain along with that of two other large banking entities.
He said, finally, that Banca March has been present in Catalonia for more than fifty years, that it is here to stay and that it maintains a business volume of 3,000 million euros in this autonomous community, in addition to the issuance of one billion in company promissory notes. so far this year. “Our objective – he concluded – is to contribute to the creation of wealth, progress and well-being.”
In turn, Banca March's general director of strategy, Joan Bonet, presented his vision on the future of the economy. History – he said – shows that after periods of intense interest rate increases such as those that have occurred, it is very difficult to achieve soft landings for the economy. That has been possible only on two of the last nine occasions. But he believed that, however, the current economic cycle cannot be considered over, since inflation is beginning to subside, both in the United States and Europe, and growth remains resilient, especially on the other side of the Atlantic. There the gross domestic product (GDP) grew by 2.15% in the second quarter, far from recession.
“The economy – said Joan Bonet – is not strong, but we think it is not going to die immediately. The growth of the world economy for 2023 will be 2.8%, and in 2024, 2.3%. These are very low percentages compared to the historical average of 3.1%. But it is also true that the most negative future scenarios are losing intensity. Faced with a restrictive monetary policy, an energy crisis that still persists, a real estate market under pressure and the slowdown in China, we find ourselves with a high level of savings, with companies and consumers less in debt than on other occasions, with a resilient labor market, with sustained fiscal stimuli and a new productive and energy model ahead. “Consequently, I believe,” Bonet said, “that interest rates are already very close to entering pause mode, although they will remain high for quite some time, perhaps for the next two years.”
Pere Guardiola, general commercial and expansion director of Grupo Godó, in his speech, stated that Banca March is a family-owned company, like La Vanguardia, and highlighted the values of this type of company, especially its commitment to long term and stability. Elisenda Vallejo, editor-in-chief of Economy at La Vanguardia, later moderated a round table to discuss alternative financing in which Jorge Bonnin, CFO of Grupo Molins, participated; Eduard Tarruell, Corporate Tresurer of Grupo Fluidra; Carlos Blasco, CFO of Grupo Jorge; Gonzalo Gómez Retuerto, general director of MARF (BME), and José Manuel Arcenegui, general director of Banca March responsible for the corporate banking area.
The three companies mentioned have chosen to seek alternative financing methods other than bank loans. Among these avenues are, as a complement to traditional financing, the appeal to the securities markets, venture capital, the issuance of securities (promissory notes, bonds or capital) in official markets, or in private financing format/alternatives, such as direct lending,
At Grupo Molins they are very satisfied with their presence in the Alternative Fixed Income Market (MARF), since it has opened the doors to the financial diversification that they had always sought. “Being able to access diverse groups of investors has provided us with flexible and versatile financing adapted to the needs of the company,” said Jorge Bonnin. “I recommend MARF to all companies, especially because of the smooth functioning of the promissory note program.”
In the Fluidra Group, as explained by Eduard Tarruell, they went directly from purely bank financing to MARF. “This was important – he said – not only to obtain a financing alternative, but to give visibility to the company in the capital markets, which is key for the future. We have progressively increased the volume of issues in the market and we are doing well.”
Entering and being in the MARF, in the opinion of Eduard Tarruell, is relatively simple. “But you can and should never forget bank financing,” he added.
Grupo Jorge's activities, both in the pork sector and in the renewable energy sector, are very capital intensive, which necessarily requires seeking external financing. At the time, as explained by Carlos Blasco, they chose to issue long-term bonds, which offered better conditions than the bank offers they received, and they complemented it with a short and medium-term promissory note program.
The presence in the capital markets forces family businesses to undertake an important exercise in transparency. But, in the opinion of Carlos Blasco, that is very good, because the more you understand the business, the easier it is to find support when difficulties arise.
The general director of Banca March responsible for the corporate banking area stated that years ago his entity detected the need to advise family businesses on the diversification of their financing sources and access potential capital pools. He said that this can be done directly through organized markets, such as MARF itself, or through direct or bilateral financing with the most suitable sponsor for the needs of the company in question, including the financing of singular assets. It is about, as he said, analyzing very well the term, the moment, the message that you want to give to the market and the interest rate. “We are very demanding – he assured – in the selection of companies and investors and we have created an ecosystem that works very well.”
José Manuel Arcenegui added that “all these new alternative financings should not be scary, since they constitute an easy and simple process if carried out with the appropriate advice.”
Gonzalo Gómez Retuerto, general director of MARF (BME), explained that, in the ten years of operation of this alternative market, which are just now, 143 companies have already issued their securities, with a total volume of outstanding debt that rises. to 8.5 billion euros, a considerable figure in his opinion. He said that these are companies with very diverse profiles and that, in addition, they are in various phases of their development process. But he assured that for every need there is the necessary capital.
The general director of MARF explained that there is currently a very strong investor demand for fixed income, since there is the opportunity to create portfolios with very interesting returns.
