It aims to maintain the group’s loan-to-deposit ratio below 100%.
Bankinter is focused on strengthening its business in Portugal and Ireland and wants its international markets to gain financial autonomy as they increase their muscle. The entity has set itself the objective of closing the financing gap that it still maintains in Portugalits second largest market, and increase deposit taking in Ireland to cover the growth of new loans with local resources.
The strategy fits with the balance sheet discipline that the bank also applies in Spain. At the group level, Bankinter has set the internal objective of maintaining the ratio of loans to deposits –loan-to-deposit ratio (LTD)in English- below 100%. At the end of September, this ratio stood at 97.6%, slightly above the 96.5% recorded a year earlier, due to a growth of 5.6% in loans and 3.7% in resources.
Analysts will put the evolution of this metric under the microscope in the coming quarterssince the ratio is close to the new revealed ceiling. It is an issue that “will continue to be part of the debate, as long as mid-single-digit loan growth expectations continue to exceed expected low-single-digit deposit growth,” notes Barclays.
In the last press conference with analysts, The bank’s CEO, Gloria Ortiz, categorically ruled out a liquidity risk and expects the loan-to-deposit ratio to remain below the 100% threshold.
The challenge of financial autonomy in Portugal and Ireland comes at a time of strong growth in both markets. In Portugal, credit has increased by 20% since the end of 2024, while retail resources have advanced by 14%.
In September, the deposit ratio in this country stood at 114%. Management considers that the Portuguese franchise still has the potential to strengthen penetration among its clients and accelerate the acquisition of new resources, which would contribute to progressively closing the financing gap.
Universal Bank
Ireland is in a different phase. Bankinter’s business volume in the country grew by 26% in the last year, driven to a greater extent by credit. The entity is expanding its local proposal from a specialized financing model to a universal digital banking offer. Last February, it launched two deposits and until August it captured 100,000 million.
“As we continue to expand our network, our goal is to increasingly fund future credit growth with locally generated deposits, thereby building, over time, a more balanced and self-funded business,” Ortiz said.
Unlike Portugal, where Bankinter has a more developed commercial base, In Ireland the group is laying the foundations for its deposit business. Therefore, rebalancing the adjustment between loans and deposits will likely require more time. In both cases, capturing local savings becomes a central piece to sustain credit growth.
Without losing sight of profitability, Bankinter seeks to make the most of its international markets. Although Portugal and Ireland still represent a minority share of the total business, they already contribute more than a quarter of the group’s revenue growth. Both countries represent 17% of total income and the ambition is for this percentage to reach 20% in the medium term.
The recent landing in the Netherlands with the purchase of the mortgage broker Tulp is one more sign of Bankinter’s international commitment. With this acquisition, the group has added 400 million euros in mortgages to its portfolio, coming from Tulp’s balance sheet.
Starting at the end of the year, the bank will finance mortgages directly from the bank, with the expectation of reaching a production of between 800 and 1,000 million next year. This growth in credit will be financed in wholesale markets through securitization, as Ortiz explained.
Source: www.expansion.com
