Informe_Anual_Cecabank

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Page. 51 Cecabank 2015 Annual Report
What are main factors affecting the markets?
Two mainly: oil and China. Both oil and China have
marked the future of the markets. On the one hand, the
downturn in raw materials, especially oil, has meant
that economies closely related to this business have
registered low growth rates and that their Central Banks
have tried to fight this slack growth with more expansive
monetary policies.
And then there’s China. The transformation that China is
trying to impose, i.e. moving from a foreign sector model
to an internal consumption model, is taking longer than
anticipated and its growth rates were notably affected.
The two problems are related. If there is to be solution in
the short term, this would either come from an increase
in raw materials prices or rapid growth of the Chinese
economy that would take us back to the rates of around
7 per cent registered a few years ago.
How do you see the Spanish economic situation?
As regards the Spanish economy, we could say that
2015 was a fairly buoyant year with strong growth,
although some economists believed it would be difficult
to reach these rates. In my opinion, this is mainly due to
themeasures taken by the ECBwhich weakened the euro
and favoured the Spanish economy’s foreign sector and
tourism, both elements our economy is very dependent
on. Secondly, access to cheaper credit to foment internal
consumption and, lastly, the geopolitical situation which
meant that the flow of tourists was perhaps greater than
at other times. Everything came together – tail winds, as
they say – to support these growth rates.
As regards uncertainties, the election process Spain
is currently involved in is drawing attention from the
market, after the events in Greece in 2015.
The outcome of this process will determine the reaction
the markets have towards different products, bonds,
equities, investor confidence…
What effect is the current monetary policy having on
the banking system?
We can see that the ECB’s interest rate cut is having
very negative effect on banks mainly, with shrinking
margins. It’s clear that it is also even having an effect
on ROEs which have dropped from over 10 per cent a
few years ago to levels of around 3-4 per cent. Although
it’s also true that the ECB’s measures aim to boost
economic growth and if they finally bear fruit, then this
will benefit the financial systems and, above all, banks.
The downturn in raw
materials, especially oil, has
meant that economies closely
related to this business have
registered low growth rates
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