Population growth and expected employment boost will maintain appetite for credit in 2026

One of the main conclusions left by the quarterly results season of the banking is that the entities have managed to compensate the fall in interest rates in the eurozone with an increase in credit granting and commissions. Under the premise of greater volume at lower cost, the sector is heading towards what could be its fourth consecutive year of record profits after recording at the end of September profits of 25,400 million, 7.4% more. Looking ahead to 2026, Accuracy anticipates a stabilization of interest income and even a slight rebound.

The consulting firm cites among the factors of this possible rebound the moderate increase in the twelve-month Euribor, which currently oscillates over 2.2%, as well as a sustained demand for credit in the heat of population growth and the tailwinds of the labor market. Membership in Social Security is at historic levels after exceeding 21 million registered, precisely in line with a record number of inhabitants. “A more stable monetary environment will stop putting pressure on the interest margin, allowing entities to adopt more balanced deposit strategies,” they explain in a report. From the European Central Bank (ECB), messages in recent weeks suggest that the price of money will remain above 2% for some time.

In fact, financing for medium-sized companies and loans for housing have become the spearhead of credit activity. “Entities have continued to focus on efficiency and digitalization strategies, reducing administrative expenses and closing offices, while consolidating their income base through recurring commissions, insurance and asset management”, a discipline that has been crucial in mitigating the drop in customer margin, an indicator that measures the difference between the income generated by a user and the expenses they produce.

All of this has allowed a boost to profitability expressed in terms of ROTE, which has continued to increase in double digits, a determining measure when establishing shareholder remuneration policies with the planned distribution of 18,000 million to the shareholders of the six main banks between 2025 and 2026. The banks have launched to reinforce their ‘pay-out’ -percentage of profits that they distribute- with ratios that range between 50 and 60% over the last few years, turning share buybacks into another means of remuneration along with the dividend.

Banco Santander has confirmed its intention to distribute at least 10,000 million in share buybacks charged to the results of the next two years, while BBVA and CaixaBank have an active plan for 993 and 500 million, respectively. The programs for acquiring own securities in banking were an anomaly until 2022 when Banco Santander and BBVA set a precedent with a trend that is here to stay despite criticism from some organizations.

One of them is the National Securities Market Commission (CNMV). Specifically, it has been its president, Carlos San Basilio, who considers that it is not “entirely correct” to integrate them into remuneration plans, given that “their effects are very uncertain in relation to the contribution and direct benefits.”

In this context, they foresee that entities will be focused on improving efficiency, reinforcing income diversification and optimizing the capital structure in a “more stable” and competitive environment. “The key will be to take advantage of the scenario to reinforce commercial growth and consolidate the generation of income beyond strictly financial income,” comments the director of the banking practice at Accuracy, Alberto Valle.