The profitability of Spanish banking against low interest rates
The president of Banco Sabadell, Josep Oliu, has highlighted the importance of maintaining the profitability of Spanish banking despite the environment of low interest rates. This is a challenging task for the banking sector, since interest rates directly influence in the banks’ profit margins
The risks of a rise in inflation
Oliu has pointed out that there are more risks of a rise in inflation instead of a reduction during the next financial year [[1]](https://202-20-216-01.folio.uoc.edu/author/asarles /). This rise may be caused by the second-round effects of wages, as a 4% increase in wages is expected this year It is important to analyze how this rise will affect inflation
Internal and external factors that can affect prices
The president of Banco Sabadell has emphasized that there are internal and external factors that can increase prices Among these factors are the price of food, the drought and the geostrategic situation It is important to take these factors into account to understand how they can affect the economy and the profitability of Spanish banking [[1]](https://202-20-216-01.folio.uoc.edu/author/asarles/).
Perspectives on interest rates
According to Oliu, the entity’s forecasts indicate that there will be three interest rate cuts this year However, these forecasts are lower than market expectations Long-term interest rates are already at rates at around 3% and 3.5% No large variations are expected in the medium term
The challenge of maintaining profitability
Despite the interest rate cuts, the president of Banco Sabadell assures that the results of 2024 will be higher than those of 2023. This demonstrates the commitment of the Spanish banking sector to maintain profitability in a challenging environment [[1]](https:/ /202-20-216-01.folio.uoc.edu/author/asarles/). Oliu highlights the solidity of the Spanish banking system and its ability to react in recent years
