Banco Santander, BBVA and CaixaBank, the three largest banks in the country, have rejected on Monday the possibility of maintaining the special tax on banks, as is being discussed these days, as they insist that the sector needs capital to continue supporting the economy.
During his participation in the XIV Financial Meeting of KPMG and Expansión, the CEO of Santander, Héctor Grisi, considered that “as a country it is not appropriate”, and explained that banks need capital to operate, to continue helping the growth of the economy and to provide credit as cheaply as possible.
At the same meeting, BBVA’s President and COO, Onur Genç, said that the way to bring in more taxes is through economic growth and not by taxing specific sectors, such as banking and energy, as the government has done.
For BBVA’s “number two”, it would not be a good idea to extend the obligation to pay this tax for more years, as “it is bad for Spain and makes no sense”.
Spain needs more capital to grow, and not only in the banking sector but in all economic sectors, Genç added.
The big banks agree that this tax, which was designed to tax ‘extraordinary profits’, is applied on income and is detrimental to the financing of the entire Spanish economy.
And in CaixaBank’s turn, its CEO, Gonzalo Gortázar, has called for a more mature debate on the matter, after recalling that the tax was conceived when there was talk of extraordinary banking profits and in reality it is levied on income, regardless of the economic cycle.
“I don’t think it makes sense” to extend the tax, added Gortázar, who warned that the more damage is done to the circulatory system – as a synonym for banking – the more damage is done to the economy.
In addition, he considers that the tax distorts competition, as smaller and foreign institutions do not pay it.
On the other hand, the CEO of Banco Santander has expressed his support for the group to continue buying back shares, as well as paying cash dividends to its shareholders, as long as the bank’s shares are trading below their book value.
The banker has insisted that the bank wants shareholders to have a return above 15%, which could be achieved if the bank earns in the second half of the year another 5,000 million, to close 2023 above 10,000 million.
More dividends from Banco Santander
For the time being, Grisi recalled that Santander raised its dividend payout from 40% to 50% and that the bank’s board of directors decided that half of that amount should be devoted to share buybacks and the other half to cash dividends.
In his opinion, there is nothing more beneficial for the shareholder at this time than share buybacks and Grissi argues that while Santander is trading below its book value, it makes a lot of sense to buy back shares.
In any case, he argues that part of the dividend should be paid in cash because many of Santander’s shareholders are also private individuals who need the money.
The remuneration of deposits
On a possible improvement in the remuneration of deposits, shortly after the vice-president of the ECB, Luis de Guindos, said at the same forum that he expects this to happen sooner rather than later, the CEO of Santander has cooled this possibility.
Grisi recalled that, in the case of the bank, there are already other products on the market that offer higher interest rates.
In addition, he insisted once again on the idea that “Spain is the most competitive country in Europe in terms of mortgages”, because although they have become more expensive and already exceed the price paid in many other countries, the difference with respect to Spanish debt is much narrower.