Rates bring no let-up in transformation pressures, says CaixaBank’s Gortázar
Rising interest margins help Spain’s biggest domestic bank more than most, but intense competition in mortgages means that fee-earning products are still vital.
CaixaBank chief executive Gonzalo Gortázar is convinced that higher eurozone interest rates will outweigh what he admits are growing asset-quality risks associated with stagflation and the war in Ukraine.
“I have a high degree of confidence on that,” he tells Euromoney, referring to his own institution at least. “Higher rates have a major impact on our income statement. We have over €300 billion in zero-cost deposits, and a large part of our balance sheet is in floating-rate loans.”
It appears that investors, and perhaps supervisors, are willing to share Gortázar’s belief that the outlook for Spain’s biggest domestic bank is relatively good. Although the European Central Bank has been slow to raise its policy rate, most Spanish mortgages are indexed to 12-month Euribor, which rose by almost a percentage point to 0.45% in the year to early June.
We need to continue evolving, not just because it may help our income statement, but because it’s what our clients need
Coupled with its relative distance from Russia, an end to negative Euribor rates helped CaixaBank’s share price increase by 20% in the year to mid May – hugely outperforming the Stoxx600 European banks index, which fell by 11% in that time.