The large bank increased its liquidity cushion by 2.5% at the end of June, to 646,000 million

MADRID, 21 Ago. (EUROPA PRESS) -

The main Spanish banking groups (Santander, BBVA, CaixaBank and Banco Sabadell) increased their high-quality liquid asset buffers by 2.5% at the end of the second quarter compared to the same period in 2021, to 646.8 billion euros, although They had been reduced by 0.8% compared to last March, according to data compiled by Europa Press from the reports sent by the entities to the National Securities Market Commission.

This buffer must be made up of assets that can be converted into cash quickly and immediately and whose loss of value is little or nil, as stated in the banking regulation of the Basel Committee. This is a measure promoted after the financial crisis of 2008 and whose objective is that banks can respond quickly to a liquidity crisis.

The Basel Committee established that these assets must be free of charges, have low risk and volatility, ease and certainty of their valuation, low correlation with risk assets, and be listed on recognized and developed markets, among other characteristics. In other words, they are those that, even in periods of severe financial stress, maintain their ability to generate liquidity. Thus, both cash and reserves in central banks, promissory notes to companies or covered bonds are included.

In addition, this fund is used to calculate the liquidity coverage ratio (LCR). Specifically, this ratio measures the relationship between this liquidity cushion and the cash outflows that it may have to face during a 30-day period of liquidity stress.

Banking regulations require that, in periods where these tensions do not occur, this ratio is at least 100% for entities with international business, which implies that high-quality liquid asset funds must be at least equal to expected net cash outflows in a period of liquidity crisis.

The Basel Committee regulation contemplates that, in times of financial stress, banks use these asset funds and can reduce the liquidity coverage ratio below 100%, as happened during the Covid-19 pandemic. In March 2020, the European Central Bank relaxed the ratio threshold to allow eurozone banks to dip into the liquidity buffer, although the coverage ratio for the eurozone not only decreased, but rose by above 170%, compared to 140% registered before the pandemic.

In December 2021, the central bank announced that it would not extend the relaxation of liquidity requirements, so banks were again required to maintain an LCR ratio above 100%.

Of the four entities analyzed, Santander is the only one that has increased its fund of high-quality liquid assets both with respect to March and in the comparison with last year. As of June 30, it had a buffer of 297.1 billion euros, 2.0% more compared to the figure for March, when the fund closed at 291.2 billion euros, while compared to June 2021, the buffer increased by 10.2%.

With this figure, its LCR ratio stood at 165% at the end of the first half, compared to 157% registered at the end of March and 164% in June 2021, always remaining above the 100% required by regulation.

CaixaBank is the entity with the second largest liquidity cushion after Santander, with 161,451 million euros in high-quality liquid assets, although this figure represents a fall of 5.1% compared to March and 0.3% compared to June 2021.

As for the LCR ratio, it doubled the required minimum of 100%, standing at 312% at the end of the sixth month of the year, although it fell compared to previous periods: at the end of the first quarter of this year, the ratio it was 315%, while in June 2021 it stood at 333%.

For its part, BBVA reduced its fund of high-quality liquid assets by 0.7% compared to March, to 133.7 billion euros, while the drop compared to June 2021 was 9.7%. However, its LCR ratio rose to 170% as of June 30 this year, compared to the figure for March, when it stood at 152%.

Finally, Sabadell had a high-quality liquidity buffer of 54,570 million euros at the end of June, 3.1% less than in March, although when compared to June 2021, it increased by 5.6%. At the end of the period, its LCR ratio was 225%, compared to 235% in March and 220% in June 2021.