Sumar demands that banks be forced to use their profits to increase capital buffers

The parliamentary group demands that the Bank of Spain explain how much it has remunerated each entity for its deposits

Spanish banks closed last year with record profits, close to 39 billion euros before taxes. The abrupt increase in interest rates, carried out by the ECB to quell inflation , explains a good part of this rise that has hit the pockets of thousands of families. However, the entities have also benefited from the remuneration paid by the Bank of Spain for their deposits, which in just over a year went from being in negative territory, at -0.5%, to 4%. For this reason, the Sumar parliamentary group demands that the institution led by Pablo Hernández de Cos detail the amounts paid to each entity. The group led by Yolanda Díaz considers that this transfer has boosted the losses of the Bank of Spain and demands that the supervisor stop using provisions to contain the losses. In addition, she believes that the agency should force entities to use their profits to raise their countercyclical capital buffers.

This Tuesday, Sumar launched a document, presented by Congressman Carlos Martín, with six proposals that it intends to be evaluated in Congress through a non-law proposal. The parliamentary group considers that the almost 39 billion euros obtained by the banks do not come from “more effective management or an increase in loans granted”, but are the consequence of “the monetary policy carried out by the ECB” .

“These are benefits that came from heaven or, rather, from the pockets of households and taxpayers,” the report points out. Specifically, Sumar estimates that “65% of banking profits come from a public transfer.” At the same time, the text estimates that mortgage payments have increased by an average of 450 euros per month since the beginning of 2022, while the remuneration for deposits has not increased with the same speed and closed the year below the average. the Eurozone.

With this gap between the revaluation of assets (loans at variable rates, for example three out of every four mortgages) and liabilities (term deposits) the margin of financial institutions has widened. This has allowed the sector to earn 26,355 million euros, 25.5% more , in aggregate among the six listed Spanish banks (Santander, BBVA, CaixaBank, Sabadell, Unicaja and Bankinter).

To alleviate this situation, Sumar proposes first that the bank tax should be made permanent, which has already been agreed with the PSOE in the government agreement . From there, he launches three other requests to the European Central Bank and two to the Bank of Spain. He demands that Frankfurt begin lowering interest rates “as soon as possible,” since he believes that the rise is the “origin of extraordinary banking profits”; He demands that he increase the mandatory unpaid reserves, and put a stop to the distribution of dividends and the repurchase of shares.

“This already happened between 2019 and 2021, when the central bank recommended not distributing dividends until September 2021 or, in any case, limiting it to 15% profit,” points out the Sumar document, which estimates that Spanish banks used more than 4,000 million euros to buy back its shares in 2023 and will continue to use a similar volume of resources this year for the same purpose.

Improve solvency

Díaz’s coalition also makes two demands to the Bank of Spain. The first involves raising banks’ capital requirements to reduce the risk posed by the last two shocks —the pandemic and the war in Ukraine. According to the formation, with this decision Spain would follow other countries such as Belgium, France and Croatia. Furthermore, the parliamentary group states that this decision would allow the entities to be strengthened, which it calls “the least solvent in the eurozone.”

Finally, Sumar demands more transparency from the Bank of Spain when reporting on the remuneration for the entities’ reserves. That is, it demands to know how much has been paid to each bank for the increase in interest rates. According to the calculations of this newspaper with the figures published by the Bank of Spain, the organization paid just over 8.2 billion for this concept last year .

These transfers have caused, in part, the losses of the Bank of Spain, which it has corrected by drawing on the cushion of provisions that it has built during good times. Despite this, Sumar believes that the institution should not have accumulated that amount, but rather should have sent the benefits to the Treasury to “promote economic growth and job creation” and now the red numbers appear.

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