Spanish rertail banking situation; is there room for profitability? : Impact of the crises of recent years on the Spanish retail banking situation and how to increase their profitability

Abstract

This paper explores the situation of the Spanish economy and its banking sector. At its core, the essay aims to give ways for Spanish retail banks to increase their profitability. The reason behind is that “One of the main challenges facing the banking sector in the short, medium and long term: the low profitability of the banking business.” (Bank of Spain, 2020). Before assessing this topic, it is important to have a vision of the economy of Spain and how and why it has changed over the past 20 years; from an economic boost to a financial crisis to a current pandemic crisis. It is then crucial to understand how this situation has affected the retail banking, and finally why the current situation aggravates the problems that retail banking was facing even more. The data behind the ideas for increasing the profitability was obtained through personal interviews with professionals of Retail Banking.