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.