The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2020 Euromoney, a part of the Euromoney Institutional Investor PLC.
Opinion

Why Spain’s hostile environment matters even to its global banks

Large numbers of domestic retail shareholders mean that public ill-will in Spain hurts Santander and BBVA just as much as other more domestic-focused lenders.

Spain-mortgage-tax-protest-R-780

An activist from the Mortgage Victims' Association takes part in a protest outside the Supreme Court in Madrid in November



Public opinion is vital to a bank’s success, wherever it is based, but it is particularly important in Spain.

This is because the business models of Spanish banks revolve more around retail and because domestic retail investors – often clients – hold an unusually high proportion of those banks’ own share capital.

BBVA and Santander might rely less on domestic retail investors than on their international business, but Santander has Europe’s biggest shareholder base at more than four million, the vast majority of which are based in Spain.

Retail shareholders’ proportion of capital is close to 40% at BBVA and Santander, while the proportion is even higher at smaller lenders such as Banco Sabadell and Bankinter.

Poor retail confidence is therefore all the more worrying in Spain, and particularly because Spanish banks still look relatively short of capital: potentially raising the prospect of a future capital raising that might either need to rely on retail, or anger retail clients for diluting their shares. 



Spanish banks have suffered particularly hard reputational hits since the crisis – often due to turning too aggressively to retail clients for capital


For example, Santander and BBVA were among the biggest banks that would have dividend restrictions in the European Banking Authority’s adverse scenario in its stress test, published early in November.








You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree