In 2012, various consultancy firms, coordinated by Oliver Wyman, subjected Spanish banking to an extreme stress test. Bankinter classified as part of the so-called ‘Group Zero’, which included the healthiest companies. Two years later, Bankinter passed European Central Bank and European Banking Authority stress tests with flying colours and they ranked it as the most creditworthy bank listed on the stock exchange in Spain and one of the most stable in Europe.
The rigorous risk policy traditionally applied by Bankinter had to pass the acid test in 2012, when the government decided to subject Spanish banking to an independent assessment of its assets. The aim was to increase transparency and clear up any lingering doubts about the sector resulting from the real estate crisis. To undertake that assessment, Banco de España contracted several specialised consultancy firms that focused on fourteen groups, representing 90% of the financial sector.
These consultancy firms, coordinated by Oliver Wyman, had to determine their capital surplus and needs, as well as the impact a hypothetical scenario of maximum economic stress would have on their accounts. That scenario foresaw a 4.1% fall in GDP in 2012 and a further 2.1% in 2013, a highly unlikely situation as was later demonstrated and which was also lacking from Spain's recent history, as it had not been seen for the last thirty years. Despite all this, Bankinter passed the test with flying colours.
Oliver Wyman confirmed that, even in such an adverse situation, the bank would have excess capital of 399 million euros and, therefore, a main capital ratio of 7.4%, clearly above the minimum 6% established by the authorities. Thanks to this result, Bankinter was classified into the so-called Group Zero, which included the healthiest and best-prepared companies prior to the imposition of specific measures, be those self-recapitalisation or derived from European aid via the Fund for Orderly Bank Restructuring, known as FROB from its name in Spanish.
Among the merits placing the bank in the select Group Zero, Oliver Wyman highlighted: its low non-performing assets index in comparison with the market average, negligible exposure to problematic sectors such as property developing, full compliance with the provisions required by two Royal Decrees on financial restructuring that had already been approved, the low volume of foreclosures (completely diversified and with strong sales trends), as well as an excellent quality loan portfolio and effective safeguards in all customer segments: companies, SMEs and individual mortgages.
The good results obtained in the thorough report were a huge slap on the back for Bankinter's long-term trajectory of good risk management, its well-chosen business strategy, the client and investment sector selection process and, in short, for practicing the most responsible banking possible. But above all, they made it clear that Bankinter could successfully tackle even the toughest situations that might arise, without requesting additional effort from its shareholders.
For even greater tranquillity, in addition to the excess capital recognised by Oliver Wyman, the bank maintained in its important balance of underlying gains, through having not disposed of its main assets during the period of financial crisis (the insurer Línea Directa, the investment fund and pension manager Bankinter Gestión de Activos, 50% of Bankinter Seguros de Vida, the online broker, and the credit company Bankinter Consumer Finance), nor having sold and later rented back its buildings, so common among other companies.
Two years after Oliver's Wyman slap on the back, Bankinter gained new recognition, this time from no less than the European Central Bank (ECB) and the European Banking Authority (EBA). In 2014, both institutions subjected the financial sector to hard stress tests. Bankinter passed with flying colours and this led to its ranking as the most creditworthy listed bank in Spain and one of the best prepared on the continent with regard to contingency.
The scenario envisaged was extremely severe: a 1% drop in GDP in 2015, an unemployment rate of 27.1% in 2016, and an 11% decrease in property prices in 2014-2016. And yet, despite this, the tests demonstrated that Bankinter would come out of that period with a comfortable capital ratio of 10.99%, compared with the 5.5% minimum established by the European regulators needed to consider that they had been properly overcome. In a more favourable scenario, with a required minimum ratio of 8%, Bankinter's would be 12.85%.
This whole stress-testing exercise was crucial in order to discover the resilience of each entity, the potential impact on capital of a worsening economic situation, and whether or not additional resources were necessary. It demanded a technically very rigorous analysis, in which independent specialists took part to guarantee its homogeneity and quality, with all the banks under review starting at the same level of transparency.
This so-called “Comprehensive Assessment” included an exhaustive review of the quality of each bank's assets, known as an Asset Quality Review (AQR). According to results of the AQR, which involved months of individualised reviewing of the portfolio of credits to companies and promoters, Bankinter did not have to make new provisions against the 2014 results, one of the few Spanish financial institutions in that situation. Similarly, the results of this examination did not oblige the bank to significantly reclassify its non-performing and healthy portfolios, underlining the fact that the provisions made by Bankinter in the most recent years had been appropriate and that the published financial information faithfully reflected the company's economic reality.
2009. Interior view of a Bankinter branch, after the change of corporate identity implemented that year.
The different milestones in this success story are remembered in a commemorative 50th anniversary microsite. On this platform, managers and employees of the company have analysed the most important moments in the bank's history, making many references to the initial period in the second half of the 1960s and the difficulties of pushing such an innovative project forward at that time.
One of the principal commemorative events was a huge party with company employees, which was enlivened by various musical performances. Bankinter's best asset is its staff, highly qualified, involved and motivated, and who transmit the bank's values in their daily lives. And the philosophy of being a "stubbornly different" bank has allowed many milestones to be achieved within the Spanish banking landscape.
Over the course of the financial year, the company shared its anniversary with its customers, in a similar format to a birthday party, inviting them to breakfast and to blow out the candles on birthday cakes in various Spanish cities.
Also as part of the anniversary, ten Spanish cities were treated to an exclusive event by Estrella Morente, accompanied by a cast of leading artists. The show was chosen because it combined the traditional with the modern, talent with the desire to excel, a reflection of the values written into Bankinter's DNA.
In addition, throughout the year several online contests were held with the aim of announcing the company's anniversary and celebrating it, in turn, with the bank's community in its various social network channels.
