Retail Banking Market Dynamics: Spain 2018

Retail Banking Market Dynamics: Spain 2018

Summary

The Spanish economy rebounded to register a growth rate of 1.4% in 2014, following a sharp decline in 2013. The real GDP growth rate then accelerated to above 3% from 2015 to 2017. This economic recovery was led by increasing private consumption as a consequence of an improving labor market. Despite a tangible decrease in the unemployment rate, 2017 GDP growth was curtailed by a strong increase in inflation, which climbed from -0.2% in 2016 to 2% in 2017.

Retail deposit balances in Spain rose 2.2% in 2017, far outpacing the compound annual growth rate (CAGR) of 0.8% reported during 2013-17. The Spanish retail deposits market is expected to continue recovering from its subdued performance. The decrease in the unemployment rate from 19.6% in 2016 to 17.2% in 2017 and a year-on-year increase in net household income of 2.6% in 2017 supported the growth of retail deposits, despite the steady decline in deposit interest rates (which fell from 0.71% in 2016 to 0.49% in 2017). This continues to weigh down depositor sentiment and may create headwinds for the growth of retail deposits in the future.

The Spanish retail mortgage and personal loan markets contracted during 2013-17, but are expected to recover over the next five years. Conversely, the credit card loans market - which reported a robust performance during 2013-17 - is expected to decelerate in the next five years. The average net interest margin for Spain was lower than France and Italy during 2013-17. The cost/income ratio also remained lower in Spain.

The report Retail Banking Market Dynamics: Spain 2018, identifies macroeconomic and competitive dynamics that impact upon the Spanish retail banking market.

Key Insights

• Among the top banks in the Spanish retail deposits market, Santander increased its market share the highest in 2017.
• Credit card balances are expected to record a compound annual growth rate of 2.0% over 2018-22.
• Mortgage balances are expected to record a compound annual growth rate of 1.2% over 2018-22.

Scope

• The outlook for deposits, credit cards, personal loans, and mortgages.
• Net changes in market share across all four product areas.
• Overall financial performance including profitability, efficiency, and income sources.

Reasons to buy

• Identify factors affecting growth prospects across the deposit, credit card, personal loan, and mortgage markets.
• Track competitor gains and losses in market share.
• Assess the financial performance of competitors.