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SPAIN | |
Best Bank: CaixaBank | ||
Spain is home to some of Europe’s best banks, but it is a challenge to compare the financial results of their efforts in their domestic market.
Take Santander. Exclude the corporate centre, and Europe contributed just 28% of group profit in 2021. Of that, Spain delivered about one third, while providing closer to half of revenues in Europe. Spain, which delivered a 6.33% return on tangible equity in 2021, is not a big part of this group which managed an 11.96% RoTE overall.
CaixaBank is different. Exclude BPI in Portugal and its equity investments in Erste, Telefonica and others, and most of Caixa’s banking and insurance income comes from Spain. That division delivered a 6.7% RoTE, so not much above Santander even though it is much bigger.
Scale has clear advantages in banking, and in 2021 Caixa made strong progress with the integration of Bankia, even though this increased costs and hurt its efficiency ratios.
CaixaBank was able to complete the full integration of the teams, technology platforms and the commercial model in just eight months after the legal merger took place.
From November 2021, the bank focused on branch and core staff reorganization, so that by the end of the first quarter of 2022, 80% of the branch integration was done and 90% of those set to leave had departed.
That should allow the bank to deliver some big cost savings over the rest of this year.
Spain remains a competitive banking market. CaixaBank’s ability to win customers and retain them distinguishes it as the best bank in Spain.
With some 19 million customers in Spain out of 21 million in total for the whole group, CaixaBank has industry-leading market shares. It has a 43% market penetration in retail banking and is the main bank for 32% of Spanish citizens. It also has a 44.4% penetration among microenterprises, 44.3% among self-employed workers and in business banking, CaixaBank has a 23.7% share of loans to companies.
The bank, led by chief executive Gonzalo Gortázar, combines a successful integrated bancassurance model with an omnichannel distribution platform. It has the biggest branch network in Spain and a higher proportion of customers use its digital channels than at any other bank.