Bankinter sees digital payments surge, urges euro digital push amidst strategic concerns
Bankinter CEO Gloria Ortiz signaled a pivotal moment for Europe’s digital payments landscape, emphasizing the continued success of systems like Bizum while issuing a stark warning about the urgency of developing a digital euro, particularly its wholesale version.
Bizum’s dominance, a growing demand for interconnectivity
Ortiz was unequivocal: “Bizum is working wonderfully.” However, the European Central Bank’s observation points to a clear trend – the accelerating integration of payment systems across borders. She predicts a faster transition to cross-border interoperability than the rollout of the digital euro itself. “It’s starting to see interconnections of instant payments across the whole of Europe, and I believe the interconnection will come before the digital euro,” Ortiz stated, highlighting a strategic divergence.
Pragmatic approach to retail digital euro
Regarding the retail digital euro, Bankinter advocates for a pragmatic strategy: leveraging existing private infrastructure. “We believe it would be much faster and less costly to establish it on the existing private infrastructure, because it’s just about making connections between the different nodes in different countries and establishing rules and standards,” she explained. This approach prioritizes efficiency and minimizes disruption – a key consideration given the potential impact on the established financial ecosystem.
Addressing financial stability concerns
Despite concerns surrounding the digital euro's impact on financial stability, Ortiz dismissed significant risks, asserting that “the amount that people are talking about wouldn’t cause any problems.” Her focus shifts to the wholesale digital euro, where she expresses considerable conviction. “We’ll give the euro digital a lot of utility in the wholesale world because that is where it will allow for 24/7, 365-day instant payments, which is not currently possible through any of the platforms that banks have,” she asserted. Bankinter believes this represents a crucial investment, urging for accelerated development – targeting 2029 or 2030 as a reasonable timeframe.
Navigating a competitive landscape
The bank's strategy is framed within a broader geopolitical context, including a cautionary note about Europe’s technological dependence. “We believe we should get ahead of private stablecoin solutions that aren’t European,” Ortiz commented, referencing a past strategic error – the sale of Visa Europe to US giant Visa. “That Europe existed and was owned by the banks, and we sold it to Visa USA… This strategic issue is a long-term issue; we can’t wake up 15 years later.” This highlights a vulnerability rooted in past decisions and underscores the need for proactive engagement.
Strong financial results underpin strategy
Bankinter reported a robust first quarter, achieving a net profit of €290.66 million, a 7.61% increase year-on-year. The interest margin rose by 5.5% to €570.6 million, while net fees climbed 8.06% to €203.23 million. Gross margin grew by 6.5% to €779 million, and operating margin expanded by 8.7% to €502.9 million. Cost efficiencies were evident with a moderate 3% rise in operating costs to €276 million, resulting in a 132-point reduction in the efficiency ratio to 35.4%. The delinquency ratio decreased 23 basis points to 1.92%, with a coverage rate of 69.5%. Key performance indicators – RoTE (Return on Total Equity) at 20% and CET1 ratio at 12.96% – significantly exceeded regulatory requirements.
Global expansion and strategic assets
The bank’s global footprint grew by 10.3%, reaching €136.678 billion in total assets, driven by €81.078 billion in loans and €96.451 billion in deposits. Off-balance sheet assets increased by 17% to €69.123 billion. Spain remains the primary market, with a pre-tax profit of €342 million, a 10% increase, while Portugal maintained €56 million and Ireland saw a 12% rise to €12 million.