The banking tax, like that of energy companies, is up in the air, as the first vice president and Minister of Finance, María Jesús Montero, has recognized. And the decision on its continuity coincides with the results presentations of the large banks. The first to present its evolution in the first nine months of the year was Bankinter, which has earned 731 million euros, almost 7% more than a year ago.
Its CEO, Gloria Ortiz, has once again followed the banks’ arguments in recent months, which consider the tax “discriminatory”, but it does not open the door to taking business from Spain, as some energy companies have suggested. Of course, he recognizes that he would have options to do so.
Ortiz has pointed out that the continuity of the tax would not be “any surprise” and that the Minister of Economy, Carlos Body, has already “said that the political will is for it to remain within fiscal policy. We don’t know more than what you publish. They know that we have had important technical and legal defects that they should solve,” he added. Also, if the banks consider “that the tax does not comply with the law, we will appeal it just as we did with the previous one.”
In recent days, some energy companies, such as Repsol, have talked about taking investments from Spain if the tax is maintained. Bankinter rules it out. “There is no threat that we will take our business anywhere,” its CEO has assured, but it would have options to expand its activity in other markets. “Of course we have the possibility of winning business,” he acknowledged at a press conference. “International business can be done from Portugal or Ireland, whoever says that means treasury activities or bond portfolio investments, can be deposited in the Central Bank of Portugal,” he gave as an example.
“But we have to have an adult level of discussion,” he clarified. Regarding energy, he assured that it is a debate in which some political forces participate. “It has nothing to do with whether the banks have more or less strength, it is a political debate.” “Our strategy is not dictated by taxes. We are where we believe we can do business and we see that we have the potential to continue growing,” he concluded, referring to Portugal and Ireland.
What would be more positive, in his opinion, is that the tax not only affects the banks but also the entire financial sector. In line with what the governor of the Bank of Spain, José Luis Escrivá, said a few days ago, who asked that the tax be changed so that it is “neutral.”
“Escrivá has said it,” said Ortiz. That vision, of a broader tax, would “eliminate one of the factors” of opposition to banking. Regarding this tax, he has indicated that “the first fallacy is to say that the tax taxes extraordinary income. There is no extraordinary income, we think it is discriminatory, but there is no longer discrimination because our corporate tax is 30%. We are going to read even the smallest fine print, we owe it to our shareholders. We have to protect what is yours and if we believe that it does not comply with the law we will appeal, but we do not have any information. Of course it is discriminatory, it is very clear to me,” he stressed.
And regarding the Treasury inspections on its liquidation, he has described them as “something normal, especially in large companies, we have continuous Treasury inspections and there is nothing extraordinary about the banking tax being reviewed. The impact is not very relevant and the tax is appealed and anything that arises will be signed in disagreement.
Does not support the regulated mortgage proposed by Sumar
Regarding the regulated mortgage, following the model of the electricity companies, that Sumar has proposed, Ortiz dismisses it as a positive idea. “Referencing a mortgage to the 10-year bond would be a mistake,” said the CEO of Bankinter. “If we look at the financial crisis” of a decade ago, this 10-year bond “had a huge risk premium that reached 600 basis points,” which would have harmed those mortgaged with that reference.
“A client cannot understand how a 10-year bond works. The Euribor is a reference with a lot of liquidity, which behaves in a much more stable way,” he assured. Also, that “the range of mortgages we have in Spain is one of the widest, we have fixed rates, mixed rates, and variable rates. We have the dual that protects very well from interest rate movements. Many times access to housing has to do with access, with having to pay 10% of expenses, which could also be waived and that could help more than one person. We have a very extensive offer. The competition is enormous.”
Regarding the dialogue between the banks and the Executive regarding Housing, Ortiz has assured that the sector has “a fluid conversation with the Government. The fundamental problem is a supply problem, until we attack that problem there is little we can do. We are in the ICO agreement for mortgages for young people, we have already made about 10 million euros since we started the product. “We are delighted to finance housing, it is our job.”
And regarding BBVA’s purchase offer for Sabadell, if it is benefiting her business, the head of Bankinter has assured that the “takeover bid, when there are business opportunities, is when there is an integration because they change office managers and that is not possible for now.” is happening.” Yes, there can be decisions, he pointed out, by “large corporations that have already suffered concentration and that can seek greater diversification. We will see if the takeover bid happens, whether it is an opportunity or not,” he concluded.
The employers charge against the tax
The two banking employers’ associations, AEB and CECA, have also charged this Thursday against the continuity of the tax. “If this initiative is maintained, Spain would become the only European jurisdiction with a permanent tax of these characteristics, which constitutes a competitive disadvantage for Spanish banks and, therefore, for the promotion of the economy, in a context in which “Spanish banking is the sector at European level that pays the most taxes,” the two employers’ associations say in a joint statement.
In his opinion, the tax “represents an obstacle to completing the Banking Union and goes against the recommendations of institutions such as the European Central Bank (ECB) or the International Monetary Fund (IMF) that advise against these taxes because they divert resources that could be used to reinforce the capital of the banks and maintain the flow of credit to families and companies.” And they believe that “this type of tax has a direct impact on the financing capacity of the real economy and, therefore, on job creation and the growth of our economy. The collection of the tax represents an estimated reduction of 50,000 million in Spain in the financing capacity of the banking sector.”
“If this tax, conceived as extraordinary, was justified by the Government due to the growth in income derived from the increase in interest rates from 2022, said justification is no longer valid,” they argue. “It should be noted that the expected evolution of interest rates does not justify the conversion of the temporary tax into a permanent tax. The ECB has begun to cut official rates. Specifically, throughout the year there has already been a cut of 75 basis points that has been reflected in drops in the Euribor. The one-year Euribor is currently below the level of December 2022, when the tax was approved. Analysts anticipate that this downward trend will continue next year such that interest rates could be at 1.75% by the end of 2025.”
#Bankinter #rules #business #Spain #due #banking #tax #clarifies #options
