Corporate & SME Banking

Strong improvement in customer acquisition and fees, and risk containment

The Corporate & SME Banking business closed another year with a very solid performance. Pre-tax profit was EUR 850 million, an increase of 0.4%. The gross operating income of the area also grew significantly (+2%). Investments grew by 7%, which enabled the business share to rise up by 6.4%, two-tenths more than in the previous year. The results were particularly positive in the case of income from fees (+9%) and customer acquisition (+19%). To complete the favourable tone of the year, risks remained very contained, with no signs of deterioration in the non-performing loan ratio, despite the fact that the rise in interest rates could affect customers' ability to pay. There were also hardly any impacts derived from the uncertainties and geopolitical risks to which the bank was exposed throughout the year (the on-going wars in Ukraine and the Middle East and political movements in the USA, Germany and France), which the markets seem to have normalised.

Moreover, the activity associated with the European Next Generation funds grew at very high rates. Deals and transactions worth 690 million euros were signed, 78% more than in 2023, which indicates significant progress in the unfolding of the programme.

Business lines

By Business Area, the activity was quite strong in the Large-corporate Banking and International Banking areas.

Large-corporate Banking saw a record gross operating income, mainly thanks to the excellent performance of fees. In this line of business, a double differentiation strategy worked especially well: strengthening investments in the public sector and focusing on expert advice (structured transactions, project finance, etc.).

Moreover, the International Banking, area performed well in a particularly outstanding year, with very notable growth in investments, earnings from fees and profits (it contributed 29% of the gross operating income of Corporate & SME Banking). The Supply Chain Finance programme, launched in 2022 and a high added value tool for supply chain management and financing, continued to be a differentiating element in its activity. The International Banking business line celebrated its tenth anniversary in 2024. Prior to 2014, the Bank was already engaged in international corporate operations, but it was from its classification as a priority business line that it started to develop as a key driver of the Bank. The focus on specialisation and training of the entire network has been key to the takeoff, continued growth and consolidation of the International Banking area in recent years.

The Medium-sized Business and SME areas had a more moderate, but still positive, growth in 2024, with significant progress in fees and customer acquisition, respectively. For another year, in the case of SMEs, the Business Plan, a model that simplifies the range of accounts and establishes a transparent and progressive fee policy, was a catalyst for activity. 66% of SMEs and 86% of new customers are associated with the Business Plan, which provides clarity to their relationship with the bank.

The transactional banking business (payments, collections, guarantees, factoring, etc.) also recorded significant growth rates. Banca Partner, for its part, had an outstanding performance in terms of acquisition (it increased by 17%, above the level of the branch network). The growth of its business indicates that there are still growth opportunities in the market.

Expectations

In addition to many other factors, such as the national and international economic environment, growth expectations for 2025 will also be influenced by the development of sustainability principles (environmental, social and governance (ESG)). The implementation of the European Directive on Corporate Sustainability Reporting (CSRD), along with other regulations, compels companies to adapt their processes and products, generating the resulting demand for financing facilities. It is expected that the trend will initially impact the investment strategy of large enterprises and will gradually filter down to all other enterprises, including those in the supply chain, which is why it occupies a priority position in the Bank's commercial management policy.