By Jesús Aguado
MADRID, April 19 (Reuters) - Spanish lenders could find
themselves affected by higher global risks, such as rising costs
of funding and liquidity stress, resulting from the recent
banking sector turmoil that has hammered share prices, the Bank
of Spain said on Wednesday.
"This may put under negative pressure the favourable
financial situation with which (Spanish lenders) started 2023,"
the central bank said in its semiannual financial stability
report, underscoring their strong liquidity levels.
But it warned the uncertainty could lead to an increase in
the cost of equity in the sector in the coming quarters, while
the materlialisation of macro-financial risks may have a
significant negative impact on banks' profitability and
solvency.
The central bank urged them to pursue an adequate and early
recognition of risks to preserve confidence in the sector, but
noted that risks to the Spanish financial system were limited
due to a lack of any significant direct exposure to banks at the
heart of the global turmoil.
Global banking shares went into a tailspin last month after
the failure of Silicon Valley Bank and two other lenders in the
United States, as well as the forced takeover of Credit Suisse by UBS , but markets have since largely calmed.
Spanish banks' exposure to Credit Suisse stands at up to 400
million euros ($437 million), according to Bank of Spain
officials.
The central bank also highlighted positive traits of Spanish
banks' business model such as a diversified deposit base, with
the bulk of retail clients' deposits covered by a guarantee
fund.
As of December, the liquidity coverage ratio of Spanish
lenders stood at levels close to 180%. A ratio above 100% means
they don't need to tap the markets in the short term to cover
for potential outflows of funds in a 30-day stress scenario.
($1 = 0.9158 euros)
(Reporting by Jesús Aguado; additional reporting by Emma
Pinedo; editing by Andrei Khalip)
Messaging: Reuters Messaging:
jesus.aguado.reuters.com@reuters.net))
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