“In other countries, corporate profits are a source of pride. Here, they are stigmatized”

Interview conducted by: J. de Antonio | Photography: David Jar

“The banking tax clashes with constitutional principles”

There is no doubt that banking is in constant change, that financial uncertainty never ceases, and that entities still have pending tasks in knowing how to communicate their social value. Alberto Aza, spokesperson for the employer’s association that groups former savings banks, defends private enterprise and its profits, and is clear that the “tax on banks” is unconstitutional, incongruous, and distorting.

With the latest financial turbulence, is there fear of a new banking crisis like that of 2008?

The instability signals we have seen in the U.S. and Credit Suisse are not translatable to the rest of European banking, much less to Spanish banking due to the extraordinary regulation imposed by the ECB. Our banks are solvent, have no liquidity problems, have increased their profitability, and are prepared to calmly face these types of turbulence.

Should companies with large profits lend a hand as the Government asks during times of crisis?

I would respond to the Government with other questions: Don’t they think it is lending a hand that Spanish banks pay the most taxes among European banks? Don’t they think we lend a hand when last year the tax contribution was 50%, meaning that for every 100 euros in profit we pay 50? Do they know that CECA entities have been accompanying the most vulnerable families for 200 years through Social Action and that we are the largest private social investor? Don’t they think we lent a hand during the pandemic when we launched the largest financial plan in Spanish banking history? Or when we initiated the first plan to alleviate the digital divide for the elderly? And that we set forth a roadmap to ensure financial services in most Spanish municipalities? I could continue, but I fear we wouldn’t have space in this interview.

Do you think the Government has launched a discrediting campaign against banking entrepreneurs whom it accuses of profiting at the expense of the crisis?

The dialogue with the Government is constant and fluid, but it is true that the bank tax has caused some distancing.

So, is the extraordinary tax on banks an attack or a mistake?

Our rejection of this tax is total because it is an inappropriate tax that clearly clashes with constitutional principles and EU law. It is also a counterproductive tax, as it will cause a contraction in GDP and job destruction, with up to 70,000 jobs accounted for in various studies. Additionally, it is an incongruent tax because instead of taxing profits, which is what it supposedly intends to do, it taxes income, disregarding operating expenses, therefore it is not proportional to the profitability of the entities. Finally, it is a distorting tax because it does not exist in any of the countries around us, which constitutes a fiscal and competitive grievance for Spanish entities.

Why do you think they point their fingers at you as if you were the villains of the story?

There is a tendency in the collective imagination of our country to criticize the profits of large corporations, especially those of banks, which is somewhat paradoxical because in other countries it is a source of pride, while here it is stigmatized.

Will a direct consequence be the restriction of capital flows and credit?

Yes. The tax will provoke lower growth due to the contraction of credit.

And will the rise in rates also reduce credit?

Since the end of last year, we have been observing a reduction in credit because the rise in rates has been transferred to the euribor, making credit contracts more expensive, and customers have opted not to contract.

Citizens have the impression that this rise only benefits banks, which raise mortgage rates but do not reward deposits. Are they right?

There are two angles to consider here. It is true that it benefits the entities due to the improvement of the intermediation margin, but it also comes with higher funding costs for the entities. Moreover, credit demand decreases and this could provoke an increase in defaults, conditions that will harm banking business. We will have to wait until the end of the year to see what the balance is.