In 2023, global economic growth slowed in a context marked by restrictive monetary policies and geopolitical conflicts. However, there were regional variations. The dynamism of the US economy and some emerging economies stood out, while growth in China and Europe was poor. Spain's performance was relatively better than that of other European countries, mainly due to recovery in the tourism sector. The sharp rise in interest rates reduced activity in the housing market and mortgage lending in particular.
In this environment, Bankinter ended the year on a path of prudent growth, in accordance with the principles expressed in its risk appetite framework, striving to balance growth, profitability and risk at all times. Commercial Retail Banking activity contracted due to the reduction in lending for housing, while Corporate Banking slowed in Spain. However, there was significant dynamism in the Portugal, EVO Banco and Ireland businesses.
The Group continued to improve its effectiveness and efficiency in risk acceptance, monitoring and recovery through increasing integration of data analytics into its processes.
The outlook for 2024 is optimistic and the bank remains committed to growth, although we will have to keep an eye on interest rates and the economic slowdown. One potential problem is that inflation could resist coming down further. This would lead to tension in monetary policy and potential deterioration of the cycle, with a slowdown in lending and reduced repayment capacity for the most vulnerable debtors and companies.
Bankinter maintains its risk appetite principles and levels and a prudent risk profile, the management of which is one of the central pillars of its competitive strategy. The bank has a risk management model of proven effectiveness that is in line with regulatory standards and best international practices, in proportion to the scale and complexity of its business activities.
The board of directors is ultimately responsible for risk management. It approves the Bank's strategy and, in particular, defines the risk appetite framework. The risk appetite framework is an internal governance document that defines:
The Risk Appetite Framework sets out the criteria for the Group's strategy, which remain stable over the years:
Risk appetite statement. Bankinter carries out its activity with a moderate and prudent risk profile. Its objective is a balanced balance sheet and a recurrent and healthy income statement, to maximise the entity's value in the long term.
Risk management principles. The Group's appetite and tolerance for risk in its activities are subject to the following principles:
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