The 2023 financial year was characterised by a number of variables that will most likely remain unresolved in 2024, at least during the first part of the year, so that some of the main uncertainties will persist.
Prominent among these dynamics is the abrupt rise in interest rates by central banks in an attempt to control inflation, which, despite providing a better scenario for the financial sector after a long period of unusually low rates, has also led to a slowdown in economic growth due to the rise in the cost of credit.
The current consensus among experts is that this upward trend in rates will no longer continue and that once inflation is definitively under control, the movement will be downwards, although this will not occur until the second half of the year.
Also persisting through 2024 will be some of the geopolitical uncertainties, such as the Ukraine-Russia war, that have had an impact on inflation and the economy, as well as other conflicts, like those in the Middle East, which are highly destabilising and have the potential to escalate.
However, 2023 was a year of economic growth that ultimately turned out weaker than expected, especially in Europe and particularly in the last quarter of the year, although Spain was able to show higher GDP growth and improved employment data than our immediate neighbours.
In this scenario, the activity of financial institutions was favoured by the normalisation of monetary policy, which has allowed institutions to obtain wider margins from the rise in interest rates without, so far, increasing the levels of non-performing loans due to the increase in the cost of credit.
As regards Bankinter, this tailwind was increased by a greater commercial drive that has reached all business lines, increasing their volume of activity and, consequently, also their income, resulting in the record profit presented by the Bank at the end of the year.
In Commercial Retail Banking, the bank consolidated its strategy based on a structure based on two large customer segments: Retail Banking and Wealth Management. As for Retail Banking, the bank was able to manage spreads effectively in an environment of falling credit, while at the same time facilitating the transfer of customers' funds from accounts and deposits to value products, such as investment funds and managed portfolios, with higher returns for the bank and also for the customer.
Wealth Management has continued to increase assets under management and its market share in this business thanks to an offering that sets it apart in customer management that is capable of meeting all their needs in a global way. As part of this proposal, the bank has consolidated its leading position in the ”alternative investment” business, giving customers the opportunity to allocate some of their investments to the real economy through new investment vehicles in all types of sectors with an excellent risk-return ratio, which have been very well received by customers.
In Corporate Banking, Bankinter has positioned itself as a priority partner for companies in areas of particular importance, such as the management and processing of European funds, which have reached a higher speed of arrival that will increase even more in 2024, or the support provided to companies in their foreign activities, as a result of the new projects arising in International Banking, an area that is becoming increasingly important in this segment.
The strong performance of consumption has provided Bankinter Consumer Finance with a way to consolidate its personal loans and credit business. It has also opened up a new avenue of activity in Portugal, with the creation of a joint venture with Sonae that aims to become the leader in consumer finance in Portugal.
Bankinter is continuing to strengthen its position in all the geographical areas where it operates, in addition to Spain - Ireland, Luxembourg and Portugal - having achieved double digit growth in all balance sheet items and record profits in Portugal.
EVO Banco has continued its positive performance over the last few years, achieving break even (the point where total costs and income balance) on its activity during the year and consolidating its position as one of the leading digital financial operators.
In summary, it was a successful year in which Bankinter boosted its diversified growth, keeping the costs and risks arising from its activity under control and extending the scope of its business with new projects with the potential to generate greater income.
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