Spanish Banks Make Record Profits Amid Inflation, But Calls for Transparency Linger

In 2023, Spanish banks made a record profit of around €39 billion before taxes, according to recent data. This increase in profits can be attributed to the sudden rise in interest rates set by the European Central Bank to combat inflation, which affected the pockets of many families. However, this does not sit well with some groups, who have called for greater transparency in how these profits are calculated and distributed.

In response to these calls for transparency, the Banco de España has stated that any breakdown of these profits is subject to professional secrecy, a concept developed by its own CEO Pablo Hernández de Cos during his time in Congress. This has prompted a group led by Yolanda Díaz to file a complaint against the bank with the Administrative Court of Justice.

During his address in Congress, Hernández de Cos did not mention the potential merger between BBVA and Sabadell, but he did emphasize the need for optimal concentration within the Spanish banking sector. Carlos Martín asked about this level of concentration during his questioning session, but most of his comments focused on monetary policy and how Spanish banks were benefiting from it.

Martin also questioned Hernández de Cos about the €8 billion transfer made by Banco de España from a deposit of €250 million from bank liquidity funds at an installation facility. This represents 65% of the profits earned by Spanish banks. When asked for details about this transfer, Banco de España replied that information disclosed by entities is subject to professional secrecy obligations.

In light of this refusal to provide detailed information on these profits and their distribution, Martin announced that he would be filing a complaint against Banco de España with the Administrative Court of Justice for failure to provide accurate and transparent information on these earnings. Accessing accurate and precise information is crucial for proper oversight and analysis of economic and financial policies.