Her remarks came at a time when the two biggest Spanish banks Santander and BBVA have reported record profits in 2022 on the back of rising interest rates as the European Central Bank battles rampant inflation. Political parties are warming up for regional and national elections later this year and are trying to lure their voters with promises.
Last year the government passed a windfall tax on Spanish banks, aiming to raise 3 billion euros ($3.28 billion) in 2023-24 to help cushion the impact from higher costs of living for the most vulnerable households. Botin said on Thursday that a mortgage in Spain carried an average interest of around 2.9%, compared to yield of some 3.5% on 10-year bonds in December, with the spread of around 60 basis points well below some 100 points in Germany. "We are one of the most competitive markets, but a sustainable financial sector needs to be profitable and generate returns above cost of capital and we are not there yet (in Spain)," Botin said. In November the government approved mortgage relief support for more than one million vulnerable households and help for middle-class families. In Spain around three-quarters of the population are homeowners, with most opting for floating-rate mortgages which are exposed to interest rate rises. ($1 = 0.9142 euros) (Reporting by Jesús Aguado and Emma Pinedo; Editing by Andrei Khalip and Jan Harvey)
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