Informe_Anual_Cecabank

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03 Our Business Model
Cecabank 2015 Annual Report
Interest rates
The financial context was marked by expansive
monetary policies continuing to be applied by the main
Central Banks but interest rates are expected to be
divergent in the short and medium term:
In the USA, the Fed initiated an upward interest
rate cycle, with an increase of 0.25 percentage
points in December as growth and employment
rates improved. Once the uncertainty surrounding
the date of monetary normalization disappeared,
the markets focused on the rhythm of the Fed’s
subsequent increases.
In Europe, the ECB wanted to stimulate the
European economy in order to meet its inflation
targets. Thus, at the last meeting in December,
Mario Draghi announced the extension of the
asset purchase programme until March 2017,
besides other measures such as including regional
government and local councils’ debt assets
denominated in euros and the reduction of the
deposit facility to -0.30 per cent.
The continuation of the expansive European
monetary policy will create a favourable
financial environment for the Spanish economy,
characterized by abundant liquidity, a lower
risk premium and a weak euro. However, this
environment will not be risk free and these risks are
associated with the reaction of the main emerging
markets to U.S. monetary normalization and with
the growing geopolitical tensions.
Retail banking
In 2015 Spanish banks ran their businesses in a
context of moderate economic growth and high
unemployment rates and they will have to continue to
work with very low interest rates and increasing
regulatory pressure:
Despite the increase in new funding granted, the
balance of bank loans to the private sector continued
to fall, to reach -4.3 per cent in December.
Off-balacne-sheet funds Loans Deposits
9 10 11 12 1 2 3 4 5 6 7 8 9
2014
%
30
25
20
15
10
5
0
-5
-10
2015
Loans and retail funds