The ECB, for the dividends and the vases chinese banking

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Mary Jesus PérezSEGUIRMadrid Updated: Save Send news by mail electrónicoTu name *

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THE European Central Bank (ECB) has learned that should not be denied hit things, because he knows better as a disappointment to sips. The bank banks know that it is always preferable that you have some remnants of hope to allow it to cool down the bitter of the negative. And in these is the thorny issue of dividends in the euro zone. A decision that did not sit, shall we say, very up there in the own hosts financial. In no. Neither at home, nor outside. In the background, there is more than what is told to a living voice. Complained that the bank executives that it is a decision taken for the sector as a whole, is stigmatising, as an industry, and does not discriminate between the best and the worst. Pointed then, once it has received the “recommendation”, that this kind of stigmatization is not good for, for example, to attract new shareholders.

But the decision was made. So what informed the Single Supervisory Mechanism (MUS), dependent of the ECB, chaired by Andrea Enria, at the end of march, nearly recently confined as they say, but so timidly that he had to launch twice the task, because the first one was not strong enough as to sound like “mandatory,” despite being a “recommendation”. The initial idea was crystal clear: all the facilities that were put at the disposal of the banks were –are– to finance the real economy, not to reward shareholders or managers. Or pay dividends or buy back shares. Until, at least October, it was decided.

And is that the banking regulator has made it clear that all the facilities for the banks thrown up by the states have to serve for the institutions to lend more money to companies, freelancers, and families who suffer the impact of the Covid-19. For this reason, you want the mattress additional generating entities and that they in advance is to finance the economy and, eye, to strengthen their reserves, to remunerate the shareholder or its directors.

The mess was served. Because, although it is first said that it would not be advisable that the banks repartiesen benefits until the autumn, a few weeks after the message was that it was forbidden categorically claiming that it was urgent to strengthen the balance sheets. Let that by taking advantage of the Pisuerga passes through Valladolid… and so they kill two birds with one stone. Enria came to ensure that even they would take legal action against those banks that do not override the distribution to its shareholders.

at the moment, as announced by the leader of the MUS to the European Parliament, the EU agencies have suspended the payment of 27,000 million euros in dividends. And as only the Spanish banks have canceled more than 4,700 million to distribute among its partners. Not precisely “pecata minuta”. Banco Santander, Unicaja and Liberbank were quick to cancel the entire deal planned for this year in charge of the benefits of 2019. Caixabank what cut in half. Bankia has decided to cancel the extraordinary dividend of 2,500 million that was scheduled to pay this year, but maintained the ordinary because the bank held the board before the “recommendation” of the ECB, like BBVA, Sabadell and Bankinter. Message well received and taken.

But, as I noted, there are more in the background. The “road show” of information the second on-board of the head of the ECB, Christine Lagarde –the former Economy minister Spanish, Luis de Guindos, has already passed from crystalline form a, and again, to dispel doubts among the reluctant. To know: the european banking today has more capital and is much more resilient than it was ten years ago, yes, and therefore is much better positioned to cope with the crisis, but its main problem is low profitability. This was already low before the crisis, and has now been reduced even further, which has been reflected in the valuations in the Stock of the banks. In these times banks are traded with a discount on book value of average of 70%, in some cases even more, of the 80% and 90%. The crisis, logically, will put further pressure on the profitability and, therefore, what was needed before its outbreak is going to be more necessary now. That includes the need to reduce the ratio of costs/revenue, or… to set in motion processes of consolidation or restructuring. And here the question of the thread be unwound…

Then as I already had all the paints that would extend until the end of the year. And… as is. The agency’s “recommended” at the beginning of June to the authorities of each country that instasen to the financial entities under its supervision to refrain from distributing dividends and carry out buybacks of its own shares “at least until January 1, 2021”, which means extend at least in three months the moratorium in force. The new order of the agency truncated because the intentions of different Spanish banks (Santander and Unicaja), who had announced that they would review in October (once the, in principle, provisional restriction of the ECB) the decision to cancel the retribution to the shareholders.

Well… notice to mariners because the great marshal, as he has been able to know ABC, they have reported unofficially that they even extended more. All 2021, at least. The controversy is again served. Although it is true that in Frankfurt they do not want nor to hear speak of the distribution of dividends in the sector, and going for long, and so pick up their scenarios up-to-date as checked every morning by the Covid-19 is still there, entulleciendo the breathing of the account of results. But, of course, the “yes”and “no” are easy to pronounce, and require much thinking.

And in our country, even though they have been doing duties, as obliged the condition of receiving support to the sector in the previous crisis, these still, they think in Europe, have not been finished. You know the ECB that the Spanish banks want to break strings, because of the dividend hang many things, and not all of them precisely in favor of shareholders or customers. Therefore, under the false pre-payment –think still– is camouflage not a few perks and they argue too much inertia operation. A china shop of old uses, foundations and social works, with the elephant of the european supervisor by the middle.

Lagarde wants once and for all our banks and savings banks, which still remain of tapadillo, stop thinking of the old you and try to like to the modern. You want to stop dividends in the short term and focus on addressing the problems of costs and the excess capacity that hinder a return with the that you create are not going anywhere in the dizzying world posCovid. The national consolidation between small banks and medium-sized, cross-border and between those of greater size, is the mantra of the new normal, the objective is that from Europe have been set to write the rules of a horizon bank where Spain does not pass unnoticed.

The european sources are direct, and the Spanish banks know what they “recommended”: “no dividends to strengthen balance sheets, improve profitability, become more attractive and encourages the consolidation. Stop rodeos on the digitisation and to focus on consolidation”, I say, because it “cuts the salary of the domes are smoke screens”. Only thus, they believe, will be the foundation of a new generation of bankers, adapted to the present, that ends with that glass that some very powerful ones see it as half-empty and that for cracked never just break. And his length bothers me. And a lot of. As vases chinese.

There is a phrase attributed to a former president of the socialist Government –of the of truth, not of papier-mâché as the us has played in grace today– Felipe González, who, although he alludes to the utility of the presidents of government, it is also often the musitarse with a calculated ambiguity in certain circumstances and moments. “We are –have that said– as large vases, chinese in small apartments: are not removed from the furniture, because it is assumed that they are valuable, but they are all the while they’re getting…”. Add: just waiting to pass someone, and with a slight rubbing to finish fly them into the ground.

María Jesús PérezRedactora head