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The Spanish banks Bankia and Sabadell analyzed the profitability of banks at the 7th Conference on the Spanish Banking Sector

The Ivie Conference included a debate between the Chief Executive Officers (CEOs) of both banks

The CEOs of Bankia and Sabadell, José Sevilla and Jaime Guardiola, respectively, participated at the 7th Conference on the Spanish Banking Sector, organized by the Ivie at the University–Business Foundation of the University of Valencia, ADEIT. In the two-way debate, both speakers reviewed the challenges facing the sector, especially, how to improve banking profitability.

Also taking part in the Conference were Joaquín Maudos, Professor of Economics at the University of Valencia and Ivie Research Deputy Director, and Santiago Carbo, Professor of Economics at Bangor University and Ivie Research Professor.

The Regional Minister for Finance and the Economic Model, Vicent Soler, was in charge of closing the event.

After an intense process of restructuring and clean-up, banks now face the challenge of recovering their levels of profitability, while hampered by low, or even negative, interest rates, a still-high volume of non-performing assets and increasing regulatory pressure, among other aspects.

José Sevilla and Jaime Guardiola showed their support toward the digitization of banking, in favor of including more and more online services, which they view as a business opportunity for the banking sector. On the other hand, they both rejected the increase in customer fees as a method to improve bank profitability.

In addition, both speakers discussed issues such as bank mergers, the low interest rates set by the ECB and the need to regain consumers’ trust in the banking sector

The 7th Conference on the Spanish Banking Sector. Recovering profits: risk factorsalso revealed some key results of bank restructuring in recent years:

Results of bank restructuring (comparison between 2008 and 2015):

• 59 fewer Spanish deposit entities in 2008, from 193 in 2008 to 134 in 2015
• 14,786 branches have been closed in Spain (32%)
• Employment in the banking sector has fallen in 73.055 jobs (27%)
• 31% less credit
• 11% in cutbacks on operational costs
• 282,000 million euros spent on clean-up (losses on impairment of financial and non-financial assets)