The historic increase in interest rates in just one year is behind the no less historic results achieved by the large Spanish banks in the first nine months of the year. The increase in the interest margins of the entities are the clearest reflection of the impact of the monetary policy of the European Central Bank (ECB) on their accounts, and are precisely the next measures to get inflation back on track and the increase in pressure to pay back. Deposits are two of the focuses that the market recommends monitoring for the future..

The six listed entities of the Ibex 35 accumulated a joint profit of 19,761 million euros until September, almost 24% more than what was obtained in the same period of 2022 and, in fact, almost more than the entire profit accumulated during the last year ( 20.8 billion). “The sector has experienced a period of resilience and growth throughout the first nine months of the year, despite the existing economic and regulatory challenges,” says Javier Molina, senior market analyst for eToro..

For Alberto Valle, director of the specialized consulting firm Accuracy, there are two keys to understanding the accounts: the interest margin and cost containment.. “Regarding the interest margin, what was expected is consolidated. A greater widening of the jaws due to the rise in rates and its impact on the revaluation of the assets of the entities. Regarding costs, their containment is reflected in the cost of efficiency that banks have shown,” he points out..

Joaquín Robles, XTB analyst, adds a third key: commissions, which have fallen less than they could have done taking into account the evolution of the business and income in recent months..

But once digested, the banking sector and analysts look to the future with their sights set on Frankfurt.. The challenge is to maintain business volumes after the stop in the rise in money prices (and the future lowering of rates). “Growth happens through the inorganic route,” says Robles. “It is the option so that the results of the entities are not so dependent on the evolution of interest rates. Although it is true that banks do not seem to be opting for this route now, it is very difficult for them not to consider it in the future,” says the expert.

The other point of attention is the remuneration of liabilities. Spanish entities pay, on average, 2.31% interest on household deposits, far from the 3.03% European average, but clients are beginning to be increasingly demanding. There are no great prospects for new rate increases, but if they rise more, banks will have to reward their clients' savings more. “The progressive need to return deposits will have an impact on this narrowing of the financial margin, all of which leads me to think that, looking to the future, banks are expected to continue having positive results, although not as brilliant as those of the last year and this year,” says Francisco Uría, Global Banking Partner at KPMG.

The bank tax, with the extension agreed by PSOE and Sumar; the ability to deal with potential defaults and credit risks; Deterioration in asset quality or credit contraction are other risks on the horizon. The latter is already evident in the banking activity of the Eurozone. In Spain alone, financing for companies fell by 3.7% in the month of September while financing for households fell by 1.9%, according to the data presented yesterday by the Bank of Spain. “It is normal for new credit to go down and also the credit balance, taking into account the repayments and amortizations that are taking place; it would be worrying if the trend continues or deepens along that line in the coming months,” says Alberto Valle..