Peio Belausteguigoitia (Bilbao, 1973), who has held various positions in the BBVA, where he has worked since 1997, he has managed the bank’s business in Spain since 2019. Passionate about Athletic Club, he is a member of a family saga that has won 13 Copas del Rey between 1909 and 1923, with the inspiration of “the Spanish fury” Jose Maria Belausteguigoitia , alias “Belauste”, in the lead; This manager affirms that this year the installments of variable mortgages will begin to decrease, while it is not so clear that the remuneration of deposits will increase much, given the liquidity of the entities. What he does highlight is the “strength” that, in his opinion, the Spanish economy has shown in a context of interest rate increases “very abrupt and in a very short time.”
After a 2023 that grew more than expected, what prospects do you have for 2024?
Spain grew 2.5% last year and Catalonia, 2.7%. For this year, our research service predicts 1.5% for Spain and around 1.4% for Catalonia. And it is important to highlight that Spain’s economy is going to grow twice as much as the European average. And by 2025 we forecast 2.4% for Spain and 2.7% for Catalonia.
¿What will be the engine?
It is tourism and also explains a little the difference in Catalonia in 2023. Looking ahead to 2025, one of the drivers should be the improvement of the European environment, since it is a very relevant commercial partner.
And how will the slowdown in 2024 impact the bank?
2023 was greatly impacted by the rise in rates, which has led to the deleveraging of the system as a whole, which was also what was sought with the change in monetary policy to stop inflation. The mortgage segment has fallen by 3.2% in the system as a whole and, in the case of BBVA, 2.2%. In the corporate business, the reduction has been 4.8%, and in BBVA, 1.5%. And the only part that has grown is consumer credit, with 2.6% in the system as a whole, and 5.9% in BBVA. With this we have gained share in mortgages, consumption and companies.
“What I see more is a relaxation in the interest rate and therefore, a relaxation in what has to do with the mortgage payment more than anything else”
And by 2024?
We expect there will still be deleveraging in mortgages and corporates, but of a significantly smaller magnitude than in 2023. In 2024, interest rates have peaked.
And when will mortgage payments start to go down?
It depends on each specific case. Among the variable rate ones, the decrease will be staggered throughout 2024. Logically, the installments will decrease according to the fall that the reference index, the Euribor, is having. I would highlight that the economy has shown a lot of strength in an environment of very sharp rate rises in a very short time.
“Financial entities in Spain have a comfortable liquidity position and that in the end ends up determining to a large extent the trend of the compensation of liabilities”
And delinquency has not skyrocketed…
Correct.
Because?
There are several factors. One is debt levels. It has nothing to do with what families and companies had 10 years ago. At the beginning of the 2008 crisis, private debt levels in Spain were well above the European average. Today we are below, so in the face of a rise in interest rates, there is greater capacity for resistance.
Is that the only element?
No. Employment has endured and has grown. There is a record of Social Security contributors. And that is a fundamental factor that moves the economy. Companies have generated investment, growth and, therefore, employment. And it is also true that there has been another positive factor in the rate increase: the accumulated savings from the covid period.
Are there more factors?
Salary increases linked to inflation. And another factor: in the most recent mortgages formalized in the five years prior to the increase in interest rates, there was a component in that new fixed rate billing. And they have had less impact.
Banks are accused of increasing loans more than deposits…
Financial entities in Spain have a comfortable liquidity position and that in the end ends up determining to a large extent the trend of the payment of liabilities.
In other words, they lack incentives to upload them…
In the current situation, and looking forward, what I see more is a relaxation in the interest rate and therefore, a relaxation in what has to do with the mortgage payment more than anything else.
BBVA has always been committed to technology…
We want to give the best possible experience and customer service. That means giving it to them 24 hours a day, seven days a week, at their convenience and allowing the customer to choose from the different interaction channels that we offer. Technology is the means that enables BBVA to offer different and better experiences in terms of convenience. It is about giving the client different experiences and financial functionalities, but which often go further. What we want is for you to have the bank as a whole in your hand, on your mobile phone, and at the same time have a very powerful in-person channel, another remote channel or by telephone.
Do they do all this with their own resources or do they turn to startups??
We have 3,000 professionals in Spain in software development, which is one of the bank’s strategic priorities. At the group level there are more than 20,000. Many times regarding the functionalities we offer we have agreements with suppliers worldwide. And in a radically different field in the world of startups, we have a business unit, but a different one. It’s called BBVA Spark, which we launched a year and a half ago, and it is already in Spain, Mexico, Colombia and Argentina. It offers financial services and products to companies, which more than ‘startups’ I like to say are companies in which technology is fundamentally the lever of their value proposition.
And in terms of artificial intelligence?
We have about 3,300 people in the group who are dedicated to data science and 800 of them work on functionalities and the development of new functionalities or the improvement of current ones based on artificial intelligence. In any case this is in its beginnings. It is one more tool than what we mentioned before, that is, one more lever to be able to offer different functionalities that are positive and beneficial for customers.
“The sector makes a fair and equitable contribution to public income, without the need for a new incremental tax on what we already pay for our activity”
They also emphasize the importance of financing sustainability…
The fundamental idea is to accompany and advise clients, both individuals and companies. The energy transition will continue to be on the strategic agenda of all companies. In this, financial entities play a role, a fundamental role. It increasingly has a growing weight in global turnover.
The new tax approved by the Government has not been good for the sector…
The financial sector is competitive and efficient and does not enjoy extraordinary profits. It makes a fair and equitable contribution to public revenue, without the need for a new incremental tax on what we already pay for our activity. It is important for businesses to be profitable, as that is what leads to the economy and society thriving. Of the income we have, around 29.5 billion, 60% is fundamentally divided into three items. One is salaries. BBVA has 121,000 employees, of which 27,000 are in Spain. A second is payment to suppliers of all types who, in turn, generate employment, growth and wealth. And a third has to do with credit to clients. And the remaining 40%, about 12,000 million, is distributed in third parties. One for the payment of taxes; another to compensate shareholders, of which we have 800,000; and another to reinforce the capital and solvency of the bank.