Spanish banks continue to enjoy a comfortable liquidity position despite the repayment of the TLTROS that they had to face last June, which prevents a significant improvement in the profitability of deposits as expected before these maturities occurred. And on June 28, European banks had to pay almost 478 billion euros of TLTROS, the liquidity injections with which the European Central Bank (ECB) irrigated the financial sector during the pandemic, and of which , more than 60,000 million euros corresponded to the main Spanish entities.
The six listed banks have revealed in their first half financial reports that their liquidity coverage ratios, known by their acronym in English as LCR, remain above the levels required by the European supervisor, without any impact. . significant of these prepayments in these metrics. In this way and within listed banks, three have managed to increase their ratios, two have seen a reduction, although they continue to double the required levels, and one entity has kept it stable.
Thus, Banco Santander reported solid liquidity, since at the end of the second quarter it managed to increase it slightly by six percentage points to reach 158%, compared to 152% in the first three months of the year and well above the 100% required. BBVA also managed to improve these levels in the second quarter of 2023 compared to the first three months of the year to 148%, compared to 142% in the previous first three months.
Caixabank, Sabadell, Bankinter and Unicaja, above 200%
The rest of the entities continue to have a particularly comfortable position, since their ratios double the minimum required of 100%. This is the case of Caixabank. The entity led by Gonzalo Gortázar closed the first six months of the year at 207%, after having increased it by 15 percentage points, while the average for the last twelve months stood at 230%. In the first three months of the year, this metric was 192%.
Banco Sabadell also doubled the levels required by the ECB to 200%, although this figure represents a drop of 25 percentage points compared to the previous twelve months. However, compared to the first three months of the year, it has fallen by 20 points. Although Unicaja Banco is the entity that heads the ranking at the end of June despite having reduced its liquidity ratio by 14 percentage points: the bank based in Malaga closed at 284% in the second quarter, compared to 298% in the previous figure .
For its part, Bankinter ended the semester with liquidity levels similar to those recorded at the start of the year. The entity led by María Dolores Dancausa ended with a liquidity ratio of 200%, compared to 198% in the first quarter.
‘Beta deposits’ forecasts are maintained
Precisely the onset of a financial crisis triggered by the bankruptcy of Silicon Valley Bank, first, and the subsequent purchase of Credit Suisse by UBS, second, put the focus on this metric. It was expected that Spanish banks would be forced to increase the remuneration of fixed-term deposits to face a possible flight of balances and these returns.
However, these expectations have not been met because Spanish entities had hoarded a lot of liquidity during the years of negative rates. In fact, it is one of the arguments that banks use to avoid an increase in the remuneration of fixed-term deposits.
Furthermore, during the presentation of the results of the first half of the year, Spanish entities have maintained their estimates of a deposit beta, the willingness that entities have to pay for deposits, at around 25%, an unchanged percentage with respect to to the same estimates from the first quarter and a figure that contrasts with the price of money in the eurozone, which is currently at 4.25%. In that sense, current deposit campaigns come mainly from digital banking and neobanks.
On the other hand, the ECB has also established the entities to which the remuneration of deposits is subject. In that sense and, with the aim of continuing to drain liquidity, the body that directs Lagard to pay the banks for the money that they keep in the institution as a minimum reserve, a measure that will come in on September 20 and is related to the strategy of draining liquidity that entities maintain.