Banks Profit Big in 2023, but Groups and Individuals Protest Lack of Transparency over Deposit Payments

In 2023, Spanish banks made a profit of approximately €39 billion before taxes. This unprecedented profit was due to several factors, including the sudden increase in interest rates set by the European Central Bank (ECB) to combat inflation, which had a negative impact on many families’ budgets. Additionally, banks benefited from the interest paid by the Bank of Spain for their deposits, which increased from -0.5% to 4% in less than a year.

However, some groups and individuals are not satisfied with this situation. For example, Sumar demanded that the Banco de España provide detailed information on how much it pays each bank for its deposits. The bank responded that this information is subject to professional secrecy established in Article 37 of the ECB and BCE Statutes and Article 82 of the Spanish Law on Credit Institutions Organization and Supervision (Ley 10/2014).

This issue came up again during a speech by Pablo Hernández de Cos in front of the Congress of Deputies’ Committee on Economy, Commerce and Digital Transformation. There were expectations that he would address possible mergers between BBVA and Sabadell, but he did not comment on that topic (“I cannot nor must I comment on an operation involving two significant entities”). However, he emphasized that “this is a good time to pay attention to the optimal level of banking concentration.”

Carlos Martín asked about this level of concentration during his speech, but mainly focused on questioning Hernández de Cos about monetary policy and how Spanish banks benefit from it. Specifically, Martín questioned whether the €8 billion transferred by the Bank of Spain from its deposit account with €250 billion liquidity provided by other banks through deposit facilities represents 65% of Spanish banks’ profits. Martín requested detailed information bank-by-bank regarding this transfer.

The official response from the Bank of Spain was given on February 28th in response to Martín’s parliamentary question: “Information disclosed by entities is subject to professional secrecy as established in Article 37 of European Central Bank (ECB) and Bank Central Europeo (BCE) Statutes and Article 82 of Law 10/2014 on Credit Institution Organization and Supervision (LOSCOIS). This applies because such information relates to individualized participation in Eurosystem monetary policy operations.”

Martín remembered this response but expressed disappointment that he could not hear it directly from Hernández de Cos if citizens do not have access to public information about these transfers: “If we cannot give them individual data because they are subject to professional secrecy, then we must at least listen carefully when they explain why we cannot receive them.” Hernández de Cos repeated his stance that no exceptions could be made: “Why can’t we give them individual data? We are subject to confidentiality obligations.”