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José Ignacio Goirigolzarri, chairman of Bankia, during his presentation at the Trends 2020 forum.

Business

Trends 2020 forum

Goirigolzarri: "The banking system has to be profitable to be sustainable"

The chairman of Bankia has explained that, currently, the profitability of Spanish and European banks is "insufficient" due to demanding regulation and negative interest rates.
 

Communication Bankia

By  Communication Bankia

Publish on 
18 September 2019 - 17:30

The chairman of Bankia, José Ignacio Goirigolzarri, pointed out that profitability, digital transformation and reputation and public image are the three challenges that banks will have to face in the near future and he has insisted on the idea that the banking system has to be profitable to be sustainable.

"For a company to be sustainable over time, society must want you to exist and see that you are useful. If you do not achieve this, sustainability is impossible”, said Goirigolzarri during his participation in the Trends 2020 forum, held by Kreab and El País. The chairman of Bankia explained that, to date, the profitability of Spanish and European banking is "insufficient" because it is below the cost of capital, due to demanding regulatory constraints and negative interest rates.

"The fact that the profitability of banking is consistently below the capital is very bad news, because it will trade below books and it will not be able to go to the market to raise capital. If they do not raise capital, banks will be under-capitalized bank, they will not be able to give credit or finance the economy and this will affect the quality of life of citizens", he summarised.

From his point of view, bank managers are responsible for getting out of this situation and he has emphasised digital transformation and the reduction of non-productive assets (NPAs) as a possible solution.

It must be a priority to have irreproachable behaviour from an ethical perspective.

José Ignacio Goirigolzarri
Chairman of Bankia

Regarding reputation, Goirigolzarri has stated that banks must prove that their conduct is unimpeachable. "It must be a priority to have irreproachable behaviour from an ethical perspective. This is the best way to improve the reputation of the industry", he said.

Elections in the US, Brexit and Europe

Regarding global issues, the chairman of Bankia has shown his forecasts for next year and has mentioned the three events that, in his opinion, will set the course of events: the American elections, the possible outcomes of Brexit and the formation of the new European Commission and Parliament.

In the long term, he thinks we have to think about the demographics related to, on the one hand, immigration policies and, on the other, productivity. He has also mentioned the importance of Europe advancing in the technological field and in the energetic transformation of society, where great lines of business and new opportunities may lie.

Focusing on the situation in Spain and the forthcoming call for elections, Goirigolzarri stated that "having political stability that allows us to have a clear framework in a globalised and international world is very valuable". "Politics seems important in times of radical change and we are living one of them", he assured.

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