CEOs of CaixaBank, Banco Sabadell, and Banco Santander emphasise the role of the financial sector in the post-Covid-19 recovery at a meeting with Esade Alumni

Esade Alumni today brought together the CEOs of three major Spanish banks, Gonzalo Gortázar from CaixaBank, Jaime Guardiola from Banco Sabadell, and José Antonio Álvarez from Banco Santander, in an online meeting moderated by Maite Barrera, president of Esade Alumni and founding partner of Bluecap. 

In an example of responsible leadership and common commitment to economic development, the three leaders of the IBEX 35 discussed the role the banking system played at the beginning of the Covid-19 crisis and the role that it must play in the future – as well as the lessons learnt from the 2008 financial crisis.

Jaime Guardiola, CEO of Banco Sabadell, highlighted the: "key role and enormous effort made by the financial sector” during the Covid-19 crisis and emphasised the differences with the previous crisis: "Spanish banks entered this crisis much better prepared. Furthermore, we are aligned with state organisations in avoiding the destruction of businesses – and the range of solutions is much wider".

Gonzalo Gortázar, CEO of CaixaBank, said that: "we are now entering a new phase in which we must find measures to support the most affected sectors and boost the recovery of the whole economy. These support mechanisms must include financial instruments that facilitate recapitalisation and enable investments to be relaunched. Banks are in a good situation, in terms of solvency and liquidity, to help these relaunches". José Antonio Álvarez, CEO of Banco Santander, explained that: "we are facing a totally unexpected crisis that generates great uncertainties. We have had to work almost exclusively digitally, which has forced us to quickly immerse ourselves in a new mode of working that has been shown to function”.

Support measures

Maite Barrera, president of Esade Alumni pointed out that: "banks are playing a key role in this crisis and contributing significantly to sustaining the economy by, for example, granting credit to families and companies, supporting state bank (ICO) guarantees and the sale of public debt, suspending various rules, and publishing guidelines to reduce the procyclicality of accounting provision regulations".

Guardiola discussed the work done by Sabadell during the crisis: "We have implemented all kinds of support measures for large companies, small firms, the self-employed, and private customers". Gortázar highlighted that "the credit portfolio of CaixaBank grew by 5.8% until May, with more than 150,000 ICO loans made, and we are processing moratoriums for more than 250,000 families".

Dividends and mergers

The three CEOs represent one of the sectors that reacted quickest to the coronavirus crisis by implementing dividend cuts and changes in pay. This preventive approach was supported by the European Central Bank, which also pointed out that the consolidation process in the Spanish banking sector could be further accelerated. 

Gonzalo Gortázar from CaixaBank, considered that: "many banks were ahead of the recommendations made at the end of March by the ECB, and were already reducing, postponing, or cancelling dividends for 2019 and/or 2020. The ECB's exceptional recommendation was prudent given the uncertainty of the impacts of the crisis. As the macroeconomic situation returns to normal, so shareholder remuneration should return to normal”. The CEO of Banco Sabadell added: "the road ahead does not require mergers, but rather accelerating digital trends, self-service, and reducing operating costs". José Antonio Álvarez of Banco Santander remarked that: "discussing cross-border mergers in Europe is difficult because there are few opportunities to generate cost synergies. We are in the same business, but there is no single European market”.

Coming out of the crisis

With regard to the prospects for exiting the crisis, the three CEOs stressed that this is not a typical recession in which accumulated economic imbalances must be adjusted. For the CEO of Banco Sabadell, the current crisis "has an eminently temporary character, unlike the global financial crisis of 2008. He added that: "we are past the worst in terms of activity".

For the CEO of CaixaBank: "all sectors will have to adapt to a context that will be complex from a macroeconomic point of view. The recovery to pre-covid levels will not come before 2022-2023". The three executives also agreed that it will be an asymmetric recovery.