Oliu warns that the banking tax harms the allocation of provisions
the president of Sabadell Bank, Josep Olivehas warned that the new banking tax could encourage the sector to make fewer provisions in order to maintain the dividend to the shareholders. During his speech at the Economic-Insurance Meeting organized by Mutualidad de la Abogacía, Oliu charged again against a tax that he considers “unfair”, since taxes extraordinary profits “that do not exist” and it affects the shareholders of the banks and not all entities.
Although the director has shown his confidence that during the parliamentary process “the most unfair aspects will be polished and more distortive of banking and financial activity”, he has also warned of the problem that this tax may pose at a time of economic uncertainty in which banks need to be more cautious and stockpiling provisions for the foreseeable future increase in non-performing loans. “If in this situation a tax is imposed that in some way is a special dividend, a part of this dividend that we had to put in provisions, because it is encouraging us to make fewer provisions to continue being able to pay the dividend to the shareholders and pay part of this dividend to the State in the new contribution. Therefore, we are facing a problem that we will see how it ends,” she warned.
In any case, the president of Sabadell has emphasized that the banking sector is facing the current scenario of economic deterioration with uncertainty but with a high solvency, much higher than it had in other crises. “Not only are capital rates higher, but also doubtful loans are lower and the toppings are more than enough. Therefore, we are in a situation that banks can face”, he stated. Oliu trusts that sector revenues will be positive in 2022 and 2023although part of the improvement caused by interest rates will be offset by higher costs.
Capping mortgages would reduce the supply of credit
Although he remains optimistic about mortgage delinquencies, he has pointed out that inflation will raise the family effort and therefore it will be a loss of purchasing power. Faced with a possible situation for part of the population to face the payment of their bills and their mortgage payments, Oliu has assured that the bank is willing to help its clients, but opposes limiting mortgage interest rates.
“Putting limits on the prices of things always produces the opposite effect to what is intended: in the case of mortgages, it would produce a decrease in the offer of mortgage credit for families. Therefore, that is a bad solution,” he warned. The bank’s proposal, on the contrary, is to offer families in vulnerable situations an extension of the amortization period of their mortgage loans, thus reducing installments, as well as moratoriums on the payment of principals while the crisis lasts if they become unemployed. “It is a solution that does not affect credit and that positively affects families“, has valued the president of Banco Sabadell.
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