International Banking

International Banking, which provides services mainly to Spanish companies, has acquired great strategic importance for the bank in recent years. There are many reasons. First, the Spanish economy's process of international expansion, which intensified in the 2008-2014 period, has triggered sharp growth in demand for external financial services. As a partial consequence, the eight of non-resident assets in Spanish banking has doubled since the onset of the crisis, now accounting for 45% of the total, whereas it represented barely 20% of total system assets in 2008. In addition, International Banking is less exposed than other lines of business to low interest rates. Hence, it is a key area for protecting the bank's profitability. Moreover, external financing transactions are off balance-sheet exposures and carry a low capital cost, which favours capital planning and compliance with regulatory requirements.

Owing to these circumstances, Bankinter has made a significant investment in recent years in teams and resources to boost its international business. The results are plain to see. The volume of brokered transactions in 2016 amounted to 52,945 million euros, with an investment of 3,440 million, which is 26.75% higher than in the previous year. International Banking now represents 20.4% of the gross margin of the Enterprise Banking area.

In its international activity, Bankinter is specialised in trade & export finance, and its principal customers are Spanish companies with interests in the international market. However, the bank also provides services to large foreign corporations that have subsidiaries in Spain. Its main products are as follows:

• Guarantees. The bank secures payment of commitments and obligations the company has undertaken with third parties abroad.
• Import letters of credit. This is a means of payment for importers in which Bankinter is the intermediary between the parties, and it commits to making agreed payments to the exporter if the latter meets the requirements specified by the importer.
• Export letters of credit. This is a means of collection in which a foreign bank, at its customer's order, undertakes to pay, accept or trade documents presented to it, via Bankinter, on behalf of one of its customers (the beneficiary).
• Medium and long-term structured finance. This includes financial solutions that enable Bankinter to work with its customers on their productive investments abroad. Buyer credit and supplier credit.

The priority sectors in 2016 were infrastructure, railway transport, renewable energy and automobiles, and the regions with the most business were the Middle East, the Persian Gulf, Europe, USA, Canada and Latin America.

For 2017, the objective is to capitalise on the incorporation of the Portugal business to present Bankinter in international markets as an Iberian bank, so as to facilitate its presence in Latin America and other regions of interest to Spanish companies. The rise in interest rates in the United States in late 2016, and the subsequent widening of margins also improve the short and medium-term business outlook, as most brokered transactions are executed in dollars.