A woman walks past a Bank of Spain branch, during the coronavirus disease (COVID-19) outbreak, in the Andalusian capital of Seville, Spain, April 10, 2020.
Spanish banks are mainly retail lenders and have been benefiting from rising interest rates, with higher returns on their loans, driven mainly by floating rate credit, while keeping deposit costs under control.
Among European lenders, Spanish banks offer the lowest one-year bank deposit remuneration.
In a context of lower demand for credit, net interest income, the difference between higher earnings from loans minus deposits costs, could deteriorate in coming months due to higher deposits costs and lower minimum remuneration requirements from the European Central Bank.
Spanish banks have so far managed to offset a decline in new mortgage portfolio by repricing their existing loans.
Persons:
Marcelo del Pozo, Jesús Aguado, Andrei Khalip
Organizations:
Bank, Spain, REUTERS, Rights, Bank of, European Central Bank, Thomson
Locations:
Seville, Spain, Rights MADRID, Bank of Spain