Santander, CaixaBank y BBVA compiten por la liquidez de las grandes fortunas

Santander, CaixaBank, and BBVA, the three largest Spanish banks, are competing fiercely for the assets of high-net-worth individuals. While these banks have largely abandoned the practice of paying interest on deposits as a general policy, they are offering better compensations for select clients with substantial assets. The Spanish major banks have placed their wealth management businesses at the core of their strategy.

Over the past few months, the sector has revamped its offerings for high-net-worth clients, who are a highly sought-after group. Within a short span of time, Santander, CaixaBank, and BBVA have introduced new products in their investment offerings aimed at affluent clients, and have also refreshed their premium non-financial services to bolster their private banking portfolio.

These offerings range from sophisticated tax planning services, real estate solutions, exclusive credit cards, expert managed investment portfolios, to travel-related services, among many others. Recently, the recent rise in interest rates in Europe has prompted these three Spanish banks to refocus their attention on the liquidity held by high-net-worth clients in their deposit accounts.

Unlike smaller entities, which offer generalized improvements to their retail customer base, the major banks have a more selective approach, adjusting their offerings based on the market conditions. For instance, Banco Santander recently increased the remuneration of its selected deposit accounts to up to 2.25%, depending on the market conditions.

The product can be availed for amounts starting from 15,000 euros and is accessible to certain clients with a certain level of banking relationship. Similarly, BBVA has been offering select and exclusive deposit rates as high as 2.25% for 12-month tenures to its valued clients. The bank emphasizes on providing customized offers to its clients, adjusting the prices based on their characteristics, relationship, and needs.

It is common for the bank to design offerings that are adjusted to the evolution of interest rates (both upwards and downwards), and based on the euribor developments, to offer its select and high-income clients. This approach allows the bank to keep up with the changing monetary conditions without the need for a generalized revision of its product catalog.

The same practice applies to CaixaBank, which also offers ad hoc proposals to its private banking clients. The bank maintains a standard offering and simultaneously personalizes the conditions on an individual basis for each client. This is a common practice in private banking, which seeks to transfer the benefits of rising interest rates to its clients through other financial products such as funds or portfolios, which offer a more attractive combination of risk and return.

These products come with tax advantages over deposits and are more profitable for the banks themselves. Deposits are regaining prominence in the bank strategy as the interest rate hike cycle progresses, although the entities do not plan a generalized offensive to increase the remuneration, as they maintain ample liquidity buffers and do not have an immediate need to raise resources.

However, the major banks concede to a more active commercial strategy in segments like private banking, where deposits are used as a tool to attract and retain high-net-worth clients. In a highly competitive business like wealth management, the ability to capture and retain such clients has become a key growth driver for the banks.