This year Bankinter begins a new phase with Gloria Ortiz as CEO of the enterprise. In this context and after the starting signal of interest rate cuts, elEconomista.es interviews Jacobo Díaz, CFO of the bank, who has just taken on digital banking among his responsibilities.
A new stage for Bankinter, a change of CEO, new responsibilities for you… How do you expect the second half of 2024 and 2025?
With enthusiasm and optimism. It will be a new period, full of challenges very similar to those we have faced in the past, but with ambitious goals in terms of growth and new goals in terms of profitability, efficiency, size… a very good time for the bank. Gloria is someone who knows the organization very well from the inside out, which will allow her to pursue growth and initiatives that I have no doubt will be successful.
What numbers do you have for 2024 and 2025?
We are not providing specific numbers, but we expect this year’s results to be higher than last year’s and 2025’s to be higher than 2024’s. investments and resources are typical and unbalanced. We’re also betting that earnings in 2025 or 2026 will grow year over year.
With margins over 17%, are these numbers sustainable?
We are in a new paradigm in the banking sector. We live in a time of very long zero or negative rates. We are now on the threshold of a new period in which the profitability of the banking sector and especially Bankinter will be higher than in the past. With this new betting paradigm, this profitability will be much more sustainable than everyone thinks. I don’t know if it will be 17%, but it will certainly be a high return on equity, above 15%.
Have customer margins peaked?
Client margins are stable. We’ve reached a margin level where we’ll stay at it longer than we think. We’re in a range close to 300 basis points and that shouldn’t change much. The profitability of a business depends not only on this customer margin, it also depends on other areas of the business, which are reflected, for example, in the commission line, as well as on the good performance of the bank in its operational, commercial and management processes. . Efficiency has the greatest impact on business profitability. Customer margins are in a new paradigm, at a higher level than in past years. If we accompany this with superior efficiency, it will yield excellent ROI.
What scenario are you dealing with?
Forecasts have missed the mark in recent years, but we expect another rate cut in the fall and certainly more at the end of this year or early next year. Monetary policy is closely linked to inflation, which is a difficult indicator to predict and appears more resilient to downward pressures than initially expected.
When might the 2.5% target be achieved?
In 2025, probably in the second half of the year, more towards the end than the middle.
Going into business, are you seeing a recovery in lending volumes?
At Bankinter, credit has been growing year on year over the past 10 years. I see no reason to stop doing this in the next few years. If this is accompanied by more favorable interest rates for bank financing, I will be quite optimistic about the development of lending growth at Bankinter. At the aggregate level, we are experiencing several years of deleveraging in the private economy, but not in the public economy. This means that companies today have much lower levels of debt than they did 10 or 12 years ago, and that families also have lower levels of debt than then. This can be viewed from two points of view: there is room for increased funding, but there will be no dramatic movements. Household financing in a lower rate scenario is likely to stabilize or begin to rise. In the corporate sector, we will continue to see greater demand for short-term loans compared to very long-term financing.
Is there a stagnant business project?
During Covid, an ICO program worth around 80,000 million was launched, the impact of which on companies continues to this day. There is financing in long-term companies that have not been renewed or renegotiated. Short-term financing is very dynamic. On the other hand, long-term financing will resume growth in a few quarters.
Do you see scope for credit to recover to the European average following deleveraging in the sector?
I think the key difference is ICO programs. In Europe, not all companies had access to such favorable financing as we have in Spain. They are not strictly comparable. The Spanish economy is growing much faster than the European economy, so credit in Spain is in better shape and has a better outlook or potential than other European economies. There are European funds, this is long-term financing available to companies. Once they become affordable enough, there will be a demand for them.
Are you already seeing the movement of funds?
Yes, we are seeing more and more movement. True, they are not in the numbers that were originally expected many years ago, but we are seeing increasing demand for these funds. At Bankinter we have a team that is constantly involved in this activity.
Bankinter shares are already above book value. How do you expect them to perform?
It is true that the market has begun to recognize the value of financial institutions and Bankinter in particular, but we continue to trade at low multiples for the bank, with a growing business and profitability at current levels. I can’t help but mention the nine euro reference, for which we believe that if we were trading at Bankinter’s usual multiples, the shares would clearly be nine euros higher.