The collapse of credit alarms banks and instigates business activism

Companies stop asking for loans and employers prepare pronouncements

The collapse of credit alarms banks and instigates business activism

Alarm in the Spanish banking . And, chained, in the business hierarchy and in government ministers in office. The demand for credit has plummeted for several months, and this has been transmitted by the heads of the entities to the acting ministers of the economic team of Mariano Rajoy, Luis de Guindos, Economía, and Cristóbal Montoro, of the Treasury and Public Administrations . The latest closed data of the banking sector available, those of the closing of the month of July, confirm that fall in demand.

As shown in the table that accompanies this information, the volume of new credit granted by Spanish financial institutions fell by 28% compared to the same month of the previous year, when it rose by 43%. But that drift has been occurring since last March, with falls ranging between 51% and 33%.

The drop is relevant in the case of mortgages, although only since July, and still not in the consumption of families, a factor that together with tourism and exports are the basis for the latest records of the recent growth of the Spanish economy . But the most worrisome item, and one that will have the greatest impact in the future, is that of the loans of more than one million euros from the companies, concentrated above all in SMEs. The banks say that “the business demand for credit has practically disappeared”.

In September, this negative trend that began in March has been maintained, according to the leaders of several financial entities consulted this last week by this newspaper. In this observation there is unanimity. The Spanish market is led by la Caixa, chaired by Jordi Gual; the Santander, directed by Ana Botín, and the BBVA, headed by Francisco González.

Image result for doubtThe doubts appear when it comes to identifying the causes of the practical disappearance of new requests for bank financing. It should be borne in mind that in the Eurozone as a whole the trend is similar also since March, although less pronounced than in the Spanish case, and has also worsened since July.

The explanations accumulate. From the policies – the Brexit, the Spanish parliamentary blockade after the 20-D and the 26-J, the crisis of the European project and the clouds that hover over relevant countries like France, Italy, and, more recently, Germany – until the economic – weak European growth, the decline in international trade that has affected large customers of Spanish companies, especially Germany.

In the case of mortgages, whose decline began in July, some bankers point to the “superficiality of the recovery, which translates into low wages and precarious contracts, while the entry of foreign capital into the real estate sector and tourism demand they have pushed property prices up prematurely, putting them out of the reach of the majority. “

Among the economic elites this evolution has triggered all the alarms. In the first place, among banks, which due to their previous difficulties, low interest rates, high delinquency and a credit portfolio with little or no financial margin must now add the general collapse of credit demand.

In the case of business organizations, their interpretation is more political. From CEOE and Foment del Treball is attributed equally to the Spanish political paralysis and the European crisis a situation of “uncontrolled expectations, in which there are no investments, beyond those of mere maintenance”

Informed of the movements of the great parties, especially of what happened during these convulsive days in the PSOE, they have kept silence, conscious of the social rejection that the pressure of the economic groups provokes. Last Wednesday, the business leaders celebrated the movements against Pedro Sánchez, although later they had to lower expectations.

However, as it approaches October 31, which marks the parliamentary limit to elect a new government before sliding into the third elections, the CEOE and Foment del Treball leaders raise debates and even public pronouncements.

Tomorrow, the Catalan employers hold the monthly meeting of its board of directors, and its president, Joaquim Gay de Montellà, could demand an agreement to avoid new elections, pending what happens this weekend with the crisis of the Socialists, although without public announcement.

In the case of the CEOE, the great Spanish business organization, chaired by Juan Rosell, its board is convened for the next day 19. And, according to sources close to the organization, it is expected to issue a public resolution if at the time of To celebrate the meeting had not reached an agreement for the formation of a government led by the Popular Party.

Caja Rural del Sur expects to close the year with a profit between 5 and 10%, which could reach 30 million

Image result for 10% It asks the Government to “listen” to them when legislating on the sector, which aspires to occupy the quota left by the savings banks

 Caja Rural del Sur expects to close 2015 with a profit greater than between five and ten percent last year, so that the result could amount to about 30 million euros, according to the CEO of Caja Rural del Sur, Rafael López-Tarruella, who has specified that the benefit figures will depend on the outcome of the judgments on the ground clauses.

The cooperative credit institution has offered its data on September 30, 2015 during the presentation of the ‘Economic Forum CRSUR’, where the president of Caja Rural de Sur, José Luis García Palacios, has appealed to public administrations, especially the legislative administrations so that “they take us more into account when legislating and develop our way of acting taking into account the sector”, in such a way that “an ad hoc ‘normative development takes place to boost the sector”.


García Palacios pointed out that last year the debate on legislating on credit cooperatives and restructuring began, once the restructuring of savings banks was completed, and García Palacios recalled that “in Spain it is not very developed the cooperative world and there are not many experts in cooperative law “, so” there is concern that the Government made some rule or decree law on the sector “, so they made a request to the Minister of Economy, Luis de Guindos, who has committed to “legislate and act taking into account the sector and its needs, in addition to parliamentary groups.”

He explained that once immersed in the election year, there is “concern” in the sector about “what will happen in the immediate future”, since “the sector has been able to solve the problems that have been recorded, which in some cases have It has been blunders, but never handfuls, and if there has been any problem we have solved it among the whole sector and it has not cost money to the public treasury “.

The president of Caja Rural del Sur therefore intends, with De Guindos’ announcement of sector reform, “to express our needs and say what the importance of our actions has been, we have not cost the State one euro, we do an important social work, and also in Europe a very important part of the financial sector is formed by credit cooperatives “.

“We want to explain what our needs are, we do not ask pears to the elm tree, but remember the importance and that we are a reference wherever we are”, added García Palacios, who insists that the cooperative credit sector “first wants to understand and listen to him and then legislate. “

García Palacios has acknowledged that the credit cooperative sector “would have liked to have the influence of savings banks” and believes that “the aids are always good, although they can make you sick”.


The numbers

Image result for the numbers calculator

Regarding the data, López-Tarruella has specified that Caja Rural del Sur has 30 of September 2015 a total of 355 offices in five provinces, with 435 ATMs, has 1,112 employees and 681,620 clients, of which 640,610 are individuals and 41,010 companies .

Loans and receivables totaled 4,040.3 million euros, commercial creditors totaled 4,613.7 million and off-balance-sheet resources totaled 667.7 million. In this way, the total business volume was 9,321.8 million euros as of September 2015.

López-Tarruella has specified that the ratio of non-performing loans coverage is 85 percent, while solvency is calculated at 17.59 percent, well above what was recorded by the Bank of Spain.

The CEO has indicated that by the end of this year he expects to increase credit investment by two percent compared to last year.

By provinces, the financial quota-deposits and assets-is 14.63 percent in Huelva, 6.37 percent in Cordoba, 5.23 percent in Seville, 3.93 percent in Cádiz and 0 , 29 percent in Malaga. In almost all of these provinces, they have raised market share compared to 2014.


The sector

<strong>The sector</strong>

López-Tarruella has also offered the data of the Caja Rural Group, which has 2,703 offices throughout Spain, with 59,000 million in assets, 4,400 million euros in own resources and which totals 9,162 employees. Rural savings banks account for five or six percent of the market share of the Spanish financial system, 12 percent of offices and seven percent of employees.

In that sense, the president of Caja Rural del Sur, José Luis García Palacios has indicated the importance of credit cooperatives in other European countries, since “the phenomenon of savings banks was exclusively Spanish.”

García Palacios, who recognizes that the crisis “has impoverished us all,” has highlighted the “strength” of credit cooperatives in the face of the crisis. Considers that “the crisis will not end while the stock of housing and land continues” and explained that in July 2006 they discovered that there were workers of the entity involved in a scam “and that was when we saw that a crisis was brewing and we apply corrective measures that have made us strong in the face of the crisis. “

He recalled that the savings banks “have disappeared as such”, so that García Palacios sees positive that in the long term they can occupy the site they have left and the market share of the old savings banks and reach 50 percent of the market share of the entire financial sector, as in other European countries.

“We have possibilities and it is possible to occupy an important place under the sun”, added García Palacios, who notes that “an unsuspected horizon opens up for us”. He recalled that in the Cooperative Group there is 15 percent of the German Cooperative Bank and the insurance company of the group that German presence amounts to 30 percent. In addition, he recalled that he has a computer society, which exports to South America and the Far East.

Also, the deputy director general and director of the Caja Rural del Sur Foundation, Guillermo Téllez, highlighted the importance of the social work and the foundation “not only in the rural world, but in urban areas as well”. He also recalled the history of the foundation, both in its training aspect and the development of the environment where it operates.

On the other hand, on the floor clauses, García Palacios has acknowledged that the entity “is reaching agreements with its clients” on this issue and in the case of unfavorable sentences “we are complying with the sentences, although we do not share them”.

Asked about the departure of Cajamar from the group of credit unions and its inclusion in the Spanish Banking Association (AEB) after founding a bank, García Palacios sees the situation as “regrettable” and believes that “the fact that it is separated is painful” , although he wishes that “he goes very well and solves his ballot”. At that point, he has rejected the phenomenon of “bancarization” as a solution to possible problems in the sector.