Bank of Spain governor Luis María Linde highlighted that persistently low interest rates, combined with the significant amount of unproductive assets on banks’ balance sheets and rising regulatory costs are affecting their business.
Mr Linde recommended that banks should make cost savings and implement new technologies – which would mean closing branches- and approve further consolidation (mergers).
Since the property bubble burst in Spain in 2008, the number of savings banks has shrunk from 45 to 14. Lenders have acknowledged they will struggle to be profitable over the coming years.
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