Granting loans associated with the COVID-19 crisis (mainly those guaranteed by the ICO, but also CESCE loans for exporting companies) was decisive in the performance of the Corporate Banking business in 2020. In both cases, Bankinter's operations was much higher than would be expected given its market share in the sector. In ICO loans, the Bank granted 7% of the loans drawn down, i.e. 40% more than its market share of 5%. To a large extent, these figures are explained by the development of specific products to finance working capital (Bankinter was the only bank doing this) and by fully remote agile procedures.
In CESCE loans, the overexertion was even greater and the Bank enabled 30% of the total loans to be granted. The work of the International Banking team was recognised with the award for the best financing project by the Asociación de Financieros de Empresa, for its management of the COVID-19 line of liquidity for companies backed by CESCE.
The intense work associated with ICO/ CESCE loans had a decisive influence on the growth of Corporate Banking's loans and receivables, which reached 28 billion euros as at December, 12% up from the previous year. Nevertheless, the NPL ratio remained stable. In March, after the state of emergency was declared, there was some rebound, which smoothed out throughout the year. Some increase in defaults is to be expected in 2021. However, the extension of the grace period and the maximum repayment period of ICO loans may moderate the increase in non-performing loans. In any case, this is expected to continue far below the industry average in Spain.
The positive performance of Corporate Banking under the strong pressure and tension generated by the coronavirus can be explained by the good response from the Bank's strategies and its professionals, at three levels:
- Teleworking went well. Fast adaptation to the new remote working conditions was key in achieving the objectives.
- The agility of the customer relationship management (CRM) system. The realised commercial activity, much higher than in previous years, and the speed of execution notably helped the area to respond to the new needs of corporate customers.
- The effectiveness of the operational area. The ICO lines demanded a very intense effort in terms of operations, arrangements and procedures.
For 2021, the area's strategy consists of maintaining its very close relationship with businesses, paying special attention to their working capital needs. There should be a new increase in investment, albeit more moderate than in 2020, with International Banking having a particularly good outlook. Business forecasts point towards a more difficult first half of the year, contingent on the progress of COVID-19 and the speed in the response to vaccines. For the second half of the year, we can expect a clear rebound in economic activity, partly driven by the arrival of aid from European funds. The dynamics of the Spanish financial sector, including several consolidation operations underway, will facilitate new opportunities to attract customers, as during the 2008-2012 economic-financial crisis. Just like at that time, the Bank will try to be very selective to leverage these opportunities in a profitable way.
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