Business Banking

Business Banking continues with its clear strategy of financing its customers: companies.

The Bank has surpassed €1.8 billion in business loans under the ECB financing facility

Bankinter's main strength in this segment is its ability to adapt and to create new products tailored to its customers' needs.

More new customers, and good returns. The year 2014 was marked by an improvement in the economic situation, although the reactivation of Spain's main macroeconomic variables has yet to translate into increased borrowing demand from companies as a whole. Against this background of deleveraging, Bankinter was one of the few banks to succeed in increasing its corporate lending portfolio.

Within this situation, the Business Banking segment continued with a clear strategy of growth in financing its customers by granting credit facilities both for operational requirements and for long-term investment projects, and especially to support companies in their internationalisation processes.

Over the past few years Bankinter has stood out as an exception to the general contraction in bank lending, and in 2014 it succeeded in meeting its objectives of increasing business lending. To be precise, corporate lending grew by 6.7% over the course of the year to reach €18,892 million.

One clear indication of the dynamism of this business segment was the commercial success of the special lines of credit linked to the ECB financing facility launched in July, several months ahead of the rest of the sector. From its launch in the summer through to the end of December, Bankinter granted more than 4,950 loans and credit facilities to companies, for a total volume of €1,814 million.

SMEs accounted for 83% of these transactions. Also, these special credit facilities became one of the main ways of winning over new customers to the Bank: 39% of transactions under these lines were with new customers.

We would highlight not only the increased number of new customers in the year, but also the good returns and the slashing of €131 million of negative impact in non-performing company loans on the profit and loss account.

Bankinter's value proposition to this segment continues to be based on the multi-channel approach and on service quality, with constant improvement in satisfaction levels perceived by customers. The success of this relations-based model with companies is evident in the strong growth in the volume of transactions carried out in confirming (up by 13%, compared with a 5% decrease in the sector), domestic factoring (up 11% while the sector declined by 8%) and handling of corporate tax payments (up by 17% as against 4% for the sector).

Corporate. Bankinter has always focused on helping large companies, which are included in this customer segment, to attain their objectives, collaborating on their internationalisation and supporting them wherever necessary.

Following a number of years of scarce liquidity, in which the financial markets were effectively closed, in 2014 abundant financing arrived from the EBB. At the same time wholesale financing became cheaper, prompting many private institutions, mainly large but also some medium-size companies, to issue their own debt in the markets after six years of lockdown. Within these companies' deleveraging process centred on improving their cash positions and opening up to new markets, Bankinter has made great efforts to adapt to their requirements, offering products tailored to their new needs.

During 2014 for example we launched a new commercial monitoring platform which provided us with a more reliable approximation of the day-to-day reality of each company. A project which will culminate in the next few years in the launch of a totally renewed management process.

Small and medium enterprises. In 2014 Bankinter once again gave clear expression to its commitment to the economic development of small and medium enterprises. Facilitating their financing by making resources available on favourable conditions, at longer terms, with flexible drawdowns or low interest rates, was a constant throughout the year. It is important for financial institutions, especially the more solvent ones, to play an active part, together with public institutions and regulators, in encouraging the flow of credit to businesses so as to enable them to finance themselves at a similarly competitive level as their European counterparts, so that together we can bring about the much-needed reactivation in the economy.

Financing of large and medium-sized companies
+6.8% despite the context of crisis and low growth

To this end, during the year Bankinter signed financing agreements with various national and international bodies. For example, it was the first Spanish institutions to reach an agreement with the European Investment Fund (EIF) for the financing of innovative SMEs, and it has signed another similar agreement with the European Investment Bank (EIB) to finance €400 million worth of investment projects promoted by SMEs (up to 250 employees) and mediumsized companies (up to 3,000 employees) in the industrial and service sectors. As part of this same drive to support SMEs, the Bank has signed similar agreements with ICO (Instituto de Crédito Oficial, Spain's state finance agency) and with the mutual guarantee societies. This is all taking place against a background in which the overall volume of lending by financial institutions to the Spanish business sector continues to fall.

Investment banking

Bankinter has become the benchmark institution in the Spanish mid-market segment.

The strength of its balance sheet, which is the result of many years of prudent lending and appropriate risk management, is a great competitive advantage in a difficult context such as the present one.

Bankinter Investment Banking is a pioneer in the finance sector in promoting business financing through channels other than traditional bank credit.

In the area of Capital Markets, Bankinter took part in the main retail market transactions in 2014, both fixed income and equities.

Advice on mergers and acquisitions
4 in 2014, intermediating between €300 million and €400 million

Rigour and solidity. Bankinter's excellent competitive positioning in the Spanish financial sector, thanks to the strength of its balance sheet, which is the result of many years of prudent lending and appropriate risk management, enabled it to turn its Investment Banking service into the market reference for the SME segment in just three years.

In an economic context marked by uncertainty and volatility, industrial and financial customers demand ever more and better advisory services. This need, together with the trust built up through the long-term relations that characterise the Bank's customers, has allowed Bankinter to become an all-round provider of financial services.

Moreover, Bankinter's firm commitment to the Business Banking and Private Banking segments has given it privileged access to clients who are likely candidates for Investment Banking services.

Bankinter's proposition in Investment Banking is grouped into three broad areas: advice on mergers and acquisitions; advice on capital market transactions; and structured and  alternative financing, thus allowing us to cover the entire range of activities relating to these areas.

Advice on mergers and acquisitions. During 2014, Bankinter Investment Banking closed three deals in the mid-market segment, in which it is the leader, brokering between €300 million and €400 million. A great result bearing in mind the current difficult market context.

In the area of Capital Markets, it took part in the most important retail market transactions of 2014. In fixed income, Bankinter was present in the debt issues carried out by the motorway companies and took a leading role in issues in the MARF alternative fixed income market. As for equities, Bankinter was present in the issue carried out by Endesa, the biggest IPO since 2007, and in 2015 it is participating in the IPO of Aena. Lastly, in the field of structured financing, Bankinter has become a reference institution in the Spanish market, leading and participating in numerous financing transactions for industrial projects, company acquisitions, asset finance, etc., lending approximately €700 million over the course of 2014 and ending the year with outstandings of €800 million, and with the objective of lending a further €650 million to €700 million in 2015.

Bankinter Investment Banking is playing a pioneering role in the finance sector in terms of promoting business financing through channels other than traditional bank credit. The agreement with insurer Mutua Madrileña, aimed at financing Spanish companies, and the agreement signed with German bank DHB for the financing of real estate transactions in the service sector (offices, warehouses, logistics parks, etc.) bear witness to its firm commitment to disintermediation in the Spanish mid-market. Both alliances complement the strategic agreement reached with Magnetar two years ago.

The Bank is once again one step ahead of the Spanish market, having spotted a trend that is becoming increasingly established in other countries, especially the US, where non-bank financing of companies reaches as much as 80% of their financing needs.

The mid-market is highly profitable, but the risks are also greater. Institutional investors need a second pair of eyes to support them in analysing unlisted companies, and Bankinter is the ideal travelling companion because it has the best customers in each industrial sector, the most loyal - as is demonstrated by its having the lowest customer churn rate - and above all because it is the best credit risk manager in Spain, as evidenced by its 4.7% NPL rate in the current environment.

International business

Bankinter has adapted to the changes experienced by the Spanish business fabric in venturing abroad.

Infrastructure, rail transport, energy, food and retailing are the most active sectors.

A bridge to the outside world. Since the onset of the economic crisis, the export sector has been the Spanish economy's only source of stable growth. Weakened domestic demand, together with rockbottom consumer spending and corporate capital expenditure, have forced companies to look for business abroad.

In the period between 2007 and 2014, exports as a percentage of GDP have risen from 17% to 34%. This growth has gone hand in hand with an increase in the export base, geographical diversification of sales and greater demand for services. This new situation, to which Bankinter has adapted in the past few years, calls mainly for off-balance sheet risk products such as:

  • Guarantees: the Bank guarantees the payment of the commitments and obligations that the company has taken on towards third parties abroad.
  • Documentary import credits (letters of credit or L/Cs): a way of paying for imports whereby Bankinter is the intermediary between the parties and undertakes to pay the exporter in the manner agreed providing the exporter complies with the requirements stipulated by the importer.
  • Documentary export credits (letters of credit or L/Cs): a means of collecting payment for exports whereby a foreign bank, acting on the instructions of one of its customers (the applicant), undertakes to pay, accept or negotiate documents presented to it through Bankinter on behalf of one of its customers (the beneficiary).

Bankinter has noted that companies are increasingly seeking to replace financing by bank guarantee facilities, which enable them to venture abroad and carry out their internationalisation projects. Bankinter's good image abroad based on credit quality and solvency gives it an advantageous capability in issuing international guarantees compared with the majority of European banks.

Strategy. Bankinter is well aware of the fact that three quarters of all Spanish exports come from just 250 companies, so it is boosting its efforts and resources to support companies in their international projects in various foreign markets.

As regards sectors, Bankinter has focused its efforts on rail transport, energy, chemicals, food and retailing, capital equipment and heavy machinery, automotive, textiles, footwear and toys, and as far as regions are concerned, on the Middle East (high-speed train to Mecca, Riyadh metro), Europe, US, Canada, Latin America and Africa.

This work has led to the establishment of the brand beyond Spain, and solid bilateral relations with foreign banks enabling us to provide our customers with the best service wherever they intend to open their businesses. In this situation the upgrading of Bankinter's rating has played a decisive role.

Business Banking

Business Banking continues with its clear strategy of financing its customers: companies.

The Bank has surpassed €1.8 billion in business loans under the ECB financing facility

Bankinter's main strength in this segment is its ability to adapt and to create new products tailored to its customers' needs.

More new customers, and good returns. The year 2014 was marked by an improvement in the economic situation, although the reactivation of Spain's main macroeconomic variables has yet to translate into increased borrowing demand from companies as a whole. Against this background of deleveraging, Bankinter was one of the few banks to succeed in increasing its corporate lending portfolio.

Within this situation, the Business Banking segment continued with a clear strategy of growth in financing its customers by granting credit facilities both for operational requirements and for long-term investment projects, and especially to support companies in their internationalisation processes.

Over the past few years Bankinter has stood out as an exception to the general contraction in bank lending, and in 2014 it succeeded in meeting its objectives of increasing business lending. To be precise, corporate lending grew by 6.7% over the course of the year to reach €18,892 million.

One clear indication of the dynamism of this business segment was the commercial success of the special lines of credit linked to the ECB financing facility launched in July, several months ahead of the rest of the sector. From its launch in the summer through to the end of December, Bankinter granted more than 4,950 loans and credit facilities to companies, for a total volume of €1,814 million.

SMEs accounted for 83% of these transactions. Also, these special credit facilities became one of the main ways of winning over new customers to the Bank: 39% of transactions under these lines were with new customers.

We would highlight not only the increased number of new customers in the year, but also the good returns and the slashing of €131 million of negative impact in non-performing company loans on the profit and loss account.

Bankinter's value proposition to this segment continues to be based on the multi-channel approach and on service quality, with constant improvement in satisfaction levels perceived by customers. The success of this relations-based model with companies is evident in the strong growth in the volume of transactions carried out in confirming (up by 13%, compared with a 5% decrease in the sector), domestic factoring (up 11% while the sector declined by 8%) and handling of corporate tax payments (up by 17% as against 4% for the sector).

Corporate. Bankinter has always focused on helping large companies, which are included in this customer segment, to attain their objectives, collaborating on their internationalisation and supporting them wherever necessary.

Following a number of years of scarce liquidity, in which the financial markets were effectively closed, in 2014 abundant financing arrived from the EBB. At the same time wholesale financing became cheaper, prompting many private institutions, mainly large but also some medium-size companies, to issue their own debt in the markets after six years of lockdown. Within these companies' deleveraging process centred on improving their cash positions and opening up to new markets, Bankinter has made great efforts to adapt to their requirements, offering products tailored to their new needs.

During 2014 for example we launched a new commercial monitoring platform which provided us with a more reliable approximation of the day-to-day reality of each company. A project which will culminate in the next few years in the launch of a totally renewed management process.

Small and medium enterprises. In 2014 Bankinter once again gave clear expression to its commitment to the economic development of small and medium enterprises. Facilitating their financing by making resources available on favourable conditions, at longer terms, with flexible drawdowns or low interest rates, was a constant throughout the year. It is important for financial institutions, especially the more solvent ones, to play an active part, together with public institutions and regulators, in encouraging the flow of credit to businesses so as to enable them to finance themselves at a similarly competitive level as their European counterparts, so that together we can bring about the much-needed reactivation in the economy.

Financing of large and medium-sized companies
+6.8% despite the context of crisis and low growth

To this end, during the year Bankinter signed financing agreements with various national and international bodies. For example, it was the first Spanish institutions to reach an agreement with the European Investment Fund (EIF) for the financing of innovative SMEs, and it has signed another similar agreement with the European Investment Bank (EIB) to finance €400 million worth of investment projects promoted by SMEs (up to 250 employees) and mediumsized companies (up to 3,000 employees) in the industrial and service sectors. As part of this same drive to support SMEs, the Bank has signed similar agreements with ICO (Instituto de Crédito Oficial, Spain's state finance agency) and with the mutual guarantee societies. This is all taking place against a background in which the overall volume of lending by financial institutions to the Spanish business sector continues to fall.

Investment banking

Bankinter has become the benchmark institution in the Spanish mid-market segment.

The strength of its balance sheet, which is the result of many years of prudent lending and appropriate risk management, is a great competitive advantage in a difficult context such as the present one.

Bankinter Investment Banking is a pioneer in the finance sector in promoting business financing through channels other than traditional bank credit.

In the area of Capital Markets, Bankinter took part in the main retail market transactions in 2014, both fixed income and equities.

Advice on mergers and acquisitions
4 in 2014, intermediating between €300 million and €400 million

Rigour and solidity. Bankinter's excellent competitive positioning in the Spanish financial sector, thanks to the strength of its balance sheet, which is the result of many years of prudent lending and appropriate risk management, enabled it to turn its Investment Banking service into the market reference for the SME segment in just three years.

In an economic context marked by uncertainty and volatility, industrial and financial customers demand ever more and better advisory services. This need, together with the trust built up through the long-term relations that characterise the Bank's customers, has allowed Bankinter to become an all-round provider of financial services.

Moreover, Bankinter's firm commitment to the Business Banking and Private Banking segments has given it privileged access to clients who are likely candidates for Investment Banking services.

Bankinter's proposition in Investment Banking is grouped into three broad areas: advice on mergers and acquisitions; advice on capital market transactions; and structured and  alternative financing, thus allowing us to cover the entire range of activities relating to these areas.

Advice on mergers and acquisitions. During 2014, Bankinter Investment Banking closed three deals in the mid-market segment, in which it is the leader, brokering between €300 million and €400 million. A great result bearing in mind the current difficult market context.

In the area of Capital Markets, it took part in the most important retail market transactions of 2014. In fixed income, Bankinter was present in the debt issues carried out by the motorway companies and took a leading role in issues in the MARF alternative fixed income market. As for equities, Bankinter was present in the issue carried out by Endesa, the biggest IPO since 2007, and in 2015 it is participating in the IPO of Aena. Lastly, in the field of structured financing, Bankinter has become a reference institution in the Spanish market, leading and participating in numerous financing transactions for industrial projects, company acquisitions, asset finance, etc., lending approximately €700 million over the course of 2014 and ending the year with outstandings of €800 million, and with the objective of lending a further €650 million to €700 million in 2015.

Bankinter Investment Banking is playing a pioneering role in the finance sector in terms of promoting business financing through channels other than traditional bank credit. The agreement with insurer Mutua Madrileña, aimed at financing Spanish companies, and the agreement signed with German bank DHB for the financing of real estate transactions in the service sector (offices, warehouses, logistics parks, etc.) bear witness to its firm commitment to disintermediation in the Spanish mid-market. Both alliances complement the strategic agreement reached with Magnetar two years ago.

The Bank is once again one step ahead of the Spanish market, having spotted a trend that is becoming increasingly established in other countries, especially the US, where non-bank financing of companies reaches as much as 80% of their financing needs.

The mid-market is highly profitable, but the risks are also greater. Institutional investors need a second pair of eyes to support them in analysing unlisted companies, and Bankinter is the ideal travelling companion because it has the best customers in each industrial sector, the most loyal - as is demonstrated by its having the lowest customer churn rate - and above all because it is the best credit risk manager in Spain, as evidenced by its 4.7% NPL rate in the current environment.

International business

Bankinter has adapted to the changes experienced by the Spanish business fabric in venturing abroad.

Infrastructure, rail transport, energy, food and retailing are the most active sectors.

A bridge to the outside world. Since the onset of the economic crisis, the export sector has been the Spanish economy's only source of stable growth. Weakened domestic demand, together with rockbottom consumer spending and corporate capital expenditure, have forced companies to look for business abroad.

In the period between 2007 and 2014, exports as a percentage of GDP have risen from 17% to 34%. This growth has gone hand in hand with an increase in the export base, geographical diversification of sales and greater demand for services. This new situation, to which Bankinter has adapted in the past few years, calls mainly for off-balance sheet risk products such as:

  • Guarantees: the Bank guarantees the payment of the commitments and obligations that the company has taken on towards third parties abroad.
  • Documentary import credits (letters of credit or L/Cs): a way of paying for imports whereby Bankinter is the intermediary between the parties and undertakes to pay the exporter in the manner agreed providing the exporter complies with the requirements stipulated by the importer.
  • Documentary export credits (letters of credit or L/Cs): a means of collecting payment for exports whereby a foreign bank, acting on the instructions of one of its customers (the applicant), undertakes to pay, accept or negotiate documents presented to it through Bankinter on behalf of one of its customers (the beneficiary).

Bankinter has noted that companies are increasingly seeking to replace financing by bank guarantee facilities, which enable them to venture abroad and carry out their internationalisation projects. Bankinter's good image abroad based on credit quality and solvency gives it an advantageous capability in issuing international guarantees compared with the majority of European banks.

Strategy. Bankinter is well aware of the fact that three quarters of all Spanish exports come from just 250 companies, so it is boosting its efforts and resources to support companies in their international projects in various foreign markets.

As regards sectors, Bankinter has focused its efforts on rail transport, energy, chemicals, food and retailing, capital equipment and heavy machinery, automotive, textiles, footwear and toys, and as far as regions are concerned, on the Middle East (high-speed train to Mecca, Riyadh metro), Europe, US, Canada, Latin America and Africa.

This work has led to the establishment of the brand beyond Spain, and solid bilateral relations with foreign banks enabling us to provide our customers with the best service wherever they intend to open their businesses. In this situation the upgrading of Bankinter's rating has played a decisive role.