Spain’s main banks have obtained a record annual profit of 26,000 million euros, almost 25% more than the previous year, despite the new extraordinary tax on banking. Rising interest rates and low remuneration of customer’s deposits have been key to the record results.

The six largest banks in Spain – Banco Santander, BBVA, CaixaBank, Bankinter, Banco Sabadell and Unicaja Banco – will publish their 2023 results later this week. According to analysts’ estimates, their profits will reach a new record of almost 26,000 million euros, 24.38% more than the previous year, including the extraordinary tax, which has cost them more than 1,100 million.

The Bankinter Group announced on Thursday 25 January that it had achieved a record profit in its history of 845 million euros, which is 51% more than in 2022 when it earned 560 million euros. The bank expects to post a new record profit in 2024.

BBVA will release its results tomorrow, Tuesday 30 January and, according to analysts consulted by the EFE agency, it is expected to achieve profits of 7,835 million euros, 22.04% more than in 2022. The bank’s chairman, Carlos Torres, expects to distribute a dividend charged to 2023 “clearly higher” than the previous year.

On Wednesday, January 31, Santander will publish its results and is expected to announce a historic profit of EUR 10,750 million, up 11.9% from EUR 9,605 million in 2022, exceeding EUR 10,000 million for the first time. These profit figures are mainly due to increased net interest income and the bank’s geographical diversification.

Next, it will be the turn of Sabadell, CaixaBank and Unicaja Banco, which on 1, 2 and 6 February will reveal their accounts respectively. The Alicante-based bank will announce earnings of 1,310 million, 52% more than in 2022, thanks to the rise in interest rates and the good performance of its British subsidiary, TSB. On the other hand, CaixaBank is expected to have obtained 4,862 million in profits, 54% more than the year and surpassing other banking entities. Finally, also according to EFECOM, Unicaja Banco will announce profits of 314.5 million, 21% more than last year.

High-interest rates, not reflected in the remuneration of deposits

In an economic context in which high inflation continued to erode savings, customers of the big banks were receiving little improvement in the remuneration of their deposits, even though the ECB continued to raise interest rates.

According to data published by the European Central Bank (ECB), of the 19 eurozone countries, banks in Spain and Cyprus were the only ones to start the year by reducing the remuneration they pay on deposits to their customers. While in the eurozone as a whole banks raised rates on new deposits to an average of 1.65%, Spanish banks went from a remuneration of 0.64% in December 2022 to 0.59% in January 2023.

Towards the second half of the year, but above all in the last quarter, some banks showed some timid reactions and with specific campaigns to slightly improve the returns on deposits and avoid the flight of customers. Even so, they have maintained profits from commissions while increasing their income and margins thanks to interest rate rises that have made mortgages and loans more expensive.

On the other hand, in the face of these record profits, the unions CCOO, UGT and FINE are up in arms and have already announced mobilisations to demand wage increases, after negotiations for the new banking agreement stalled last month. The fact is, a decade after the bank bailout in Spain, not only have hopes of recovering the billions that were injected into the banks vanished, but Spanish banking has become the most profitable and penny-pinching in Europe.

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