Individual retail banking and foreign customers

The payroll account is the way in

The individual retail banking market, the largest customer segment for financial institutions, is highly competitive. In 2017 there was especially fierce competition for attracting customers, both through traditional channels and, in particular, through the website and other digital tools. The payroll account was consolidated as the main factor in attracting customers and, therefore, the number of active individual customers grew by 3.8%, reaching a total of 335,775.  The main features for the year were as follows:

Assets. Consumer loans were one of the Bankinter's star products, and throughout the year the Bank made a significant effort in terms of resources and technology to attract individual customers, achieving a 20% increase in new personal loans, despite the growing presence of competitors. However, Bankinter adopted a more reactive rather than proactive position with regard to granting mortgage loans, given the strong competition. Given the challenging market circumstances, both in terms of price (with record low interest rates) and the conditions for granting mortgages, it has become more difficult to make these types of loan transactions more profitable without increasing the level of risk. The Individuals segment saw new mortgages arranged for a total of 673 million euros. 

Liabilities. The market shifted with regard to payroll accounts, a product that involves direct debiting of bill payments and holding of debit and/or credit cards, and was confirmed to be the main entry point to the bank. In 2017 many entities, which in previous years had fiercely competed to attract customers through payroll accounts, reduced their profit associated with these accounts. However, Bankinter's 5% payroll account kept its beneficial conditions (which included 5% interest up to 5,000 euros for the first year and 2% interest in the second year) and it consolidated its position as a very competitive product. Consequently, in 2017 a total of 31,002 payroll accounts were opened and 45,371 customers were attracted, up 34% on the previous year. 'Account 22', which was launched in 2016 and aimed at the children of the Bank's customers, also cemented its place during the year. There are no conditions, it carries no obligations and it generates no fees. It allows the customer to have a credit card from the age of 18, make online domestic transfers free of charge and use the mobile phone payment service. This product is part of Bankinter's aim of offering an account for every type of customer.

The Bank also met its goal of increasing the quality of its service in the individual retail banking segment. The increase in the number of new customers and the improvement in its customer satisfaction indexes are indicators that reflect this trend. 

Foreign customers

Foreign customers are concentrated mostly in the Mediterranean coast and the Canary islands, and their entry point to the Bank tends to be the financing of home purchases. To provide them with the appropriate service, Bankinter has highly qualified staff in these regions who know their specific needs and have extensive knowledge of foreign languages.

In 2017, the foreign customers business gained traction at the end of the year, especially as a result of the recovery of the real estate market for non-residents, which posted significant growth, especially in the Canary Islands. This circumstance gave rise to an increase in the Bank's mortgage loans to foreigners, although with relatively moderate growth due to its policy of prudence in analysing risks. 

The number of active foreign customers grew by 4.7% in 2017. Total foreign customer funds increased by 5.2% and the related loan book amounted to 633 million euros.

With regard to 2018, the objectives for the individual retail banking and foreigner customer segment focus on enhancing its strategy of achieving maximum customer loyalty in the shortest time possible. The Bank therefore plans to develop digital tools that help in activating the customer's account from the very beginning, such as facilitating the switch of banks.