The increase accounted for a quarter of the boost to CaixaBank’s net interest income in the quarter, Chief Financial Officer Gonzalo Gortazar said on a webcast today. The company took a combined 18.5 billion euros in three-year loans from the ECB in December and February.
“With extra liquidity, we get an additional push,” said Gortazar, adding that the contribution from the ECB loans amounted to about 2.5 percent of the bank’s net interest income in the period. “The trend is positive and we expect our net interest income to continue giving us good news.”
The ECB lent more than 1 trillion euros to banks in December and February, underpinning demand for government bonds as it channeled cash to lenders and giving them an opportunity to boost revenue. Spanish bank holdings of local debt surged to 220 billion euros in January from 178 billion euros in November, Treasury data show.
Spain is the country that will make the best use of the European Central Bank’s three-year loans among countries in the euro region in channeling credit to the economy, CaixaBank Chief Executive Officer Juan Maria Nin said at a news conference in Barcelona.
“I’m not a macro-economist, but I read reports and I have information and I believe the country where the ECB money has most and best reached the real economy and will do so is Spain,” Nin said. The ECB’s money has helped “normalize” liquidity and therefore sovereign debt prices, he said.
A significant part of the money remains deposited at the ECB as Spanish banks seek to cover their debt maturities over the next three years, Nin says. The decision to provide the loans was a “benign and intelligent” step by the ECB as it sought to tackle an “asphyxia” in the flow of financing in the region’s economies, he said.
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