In 1973 Bankinter obtained the authorisation to quote on the Stock exchange. One of the great satisfactions in all this time was its proclamation, in 2013, as the most profitable bank for shareholders out of the 47 that make up the Euro Stoxx index and the second most profitable in the Ibex 35.
In 1987, taking advantage of the liberalisation of interest rates, Bankinter launched the Special Deposit, which represented one of its greatest milestones. In a short time, customer resources grew 70%, in contrast to the 10% of the rest of the banks.
In 1972, at the chairman's initiative, Emilio Botín Sanz of Sautuola and López, Bankinter took a momentous decision: opening to new members. It was carried out in two stages: in August of that year, it transferred the rights to subscribe a capital increase in favour of shareholders of Banco Santander, and in 1973 it requested and was granted the authorisation to be listed on the Stock exchange. By the time the process had ended, Bankinter had gone from having two owners at the time of its inception to having 30,000. Banco Santander and the Bank of America still played a major role, but their participation diluted after disposing a part of it.
The reasons behind its listing on the Stock exchange were no different from those in the majority of cases: it provided a mechanism for providing the shareholders with liquidity; it assigned the investment a value by setting a price at which securities could be bought or sold; it provided a stable means of procuring long-term funds; and it conferred a genuine prestige, as being listed on the Stock exchange was not within everyone's reach. The operation was a total success, and it demonstrated the remarkable degree of maturity reached by the bank in a little more than seven years of life.
The Stock exchange would also be, in the eighties, the stage in which the two founding partners would withdraw completely from Bankinter's capital. Banco Santander and the Bank of America gave birth to it in 1965, taking advantage of the liberalisation of the financial system approved by the Government; they made it into a competitive bank; and they had expanded its shareholder base. After all this, they believed that the time had arrived to end their institutional participation in this adventure; however, the surname Botín would continue to be closely linked to the bank, as it still is today.
As might be expected, Bankinter's presence in the market over these years came with its joys and sorrows. Nevertheless, one of the great satisfactions was, undoubtedly, its proclamation in 2013 and 2014 as the most profitable bank for shareholders out of the 47 that make up the Euro Stoxx index and the second most profitable in the Ibex 35. In fact, Bankinter opened that financial year with a capitalisation of 1,770 million euros and closed it with 4,500 million, which in round figures is equivalent to a rise of 150%.
The reason behind such a spectacular rise can be explained by the positive quarterly results that it presented throughout the year, the rising expectations of profits expressed by the analysts and the general improvement of the foreign perception of Spanish companies, which translated into a considerable drop of the risk premium. HSBC, Banco Santander and Citibank published favourable reports on Bankinter; and Standard & Poor´s raised its rating from “stable” to “positive”.
Madrid, 1970s. Investors and Brokers in the courtyard of the Madrid Stock Exchange.
View of two Bankinter branches where the Special Deposit was advertised.
The cash certificates were Bankinter's star products for many years and they provided it with the necessary financial power for its expansion. However, this star product would be eclipsed by the Special Deposit, which was launched in 1987, taking advantage of the liberalisation of interest rates established by the Government. It yielded a return of 14%, 15% and even 16%, which is currently totally unimaginable, and thanks to this product, the bank broke new ground.
The Special Deposit was launched in a similar situation as today, when Spain had just experienced a severe economic crisis, which concluded in 1985. Bankinter was lucky to face this setback in the economy while it was still very fresh and had very clear ideas of what it wanted to do and how it wanted to do it, always differently from others. This gave it an edge over its immediate competitors, which reacted late and were not able to make the most of the opportunity with which they were presented.
The most senior bank employees will still remember the long queues that formed at the offices every day to contract deposits. It reached a point in which customers who could not or did not want to queue would slip an envelope with cash under the door and then formalise the operation when things quieted down. As a result, Bankinter's customer resources grew a staggering 70% in a very short time, in contrast to the 10% of the rest of the banks. This product became the bank's driver for growth, helping it double its income statement and balance sheet in the following two years.
The aggressive strategy used to capture funds and that accompanied the launch of the Special Deposit enabled it to take a tremendous step forward. Not only did the resources increase, but the number of employees and branches did so too. It reached a point where a branch was opened every month; personnel had to be contracted just to attend this spectacular demand. While the cash certificates had to be sold door-to-door, the Special Deposit was simply dispatched. Even the computer system collapsed as a consequence of the flood of additions.
The Special Deposit not only represented a milestone in the first fifty years of Bankinter's life, it also proved that it could operate in retail banking, which is not a minor achievement for a bank that was created with the purpose of funding industrial investments.
