The Capital Markets area, which manages the trading and distribution of treasury products and the Bank's balance sheet, carried out its activity in a general favourably environment in 2017.
In this scenario, the trading area was active in the foreign exchange, equities and fixed income markets. Bankinter benefited from the its status as a market maker in government debt and bills of exchange and a co-leader in syndicated issues of Spanish Treasuries.
The Bank's growing activity in the private banking segment generated notable demand for the products designed by the distribution area, whose work in helping customers to access foreign exchange markets, interest rate hedges and fixed income is also worthy of note.
The Bank's balance sheet continued the sustained improvement in its liquidity position. The major increase in lending was offset by an even larger growth in customer funds. This fact, along with the application for long-term funds from the ECB under its TLTRO II programme of funding operations, made it unnecessary to issue long-term debt. The only public issue was for 500 million euros of Tier 2 subordinated debt to improve the capital base, paid out on 6 April, which was oversubscribed by almost 5 times the amount to be placed.
Wholesale funding maturities are distributed over time in a manner so as to minimise problems refinancing, and the Bank's interest rate risk is also kept at acceptable levels. Indeed, the positioning of the fixed income ALCO portfolio and the balance sheet hedges mitigated the adverse effect of the Euribor interest rates, to which the majority of the bank's loans are referenced.
In relation to foreign currency, the Bankinter's policy was to hedge all structural positions, thanks to which its income statement was not affected by the fluctuations in major currencies in 2017.
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