Pay up!

BANKS in Spain have been told to start paying clients better rates for their savings as interest rates continue to climb.

The call has come from Economy Minister, Nadia Calvino, speaking at an event organised by the BBVA bank. Banks have cashed in with increased profit margins due to the European Central Bank tightening its monetary policy and lifting interest rates to 3.5% - the highest in over 20 years. Most banks though have not passed on the full benefit of rate rises to customers who have deposit accounts.

Nadio Calvino said: “I have no doubt that the Spanish banking sector has to start transmitting the rise in interest rates for the benefit of customers and Spanish citizens.” base’.

In the group’s latest annual report, published in May, it noted a ‘strategic review’ of its operations in Spain was part of a multi-faceted action plan to spur growth across several European markets.

Deutsche Bank telecoms analyst Robert Grindle said that a partial or full sale of Vodafone’s Spanish division, including its fixed-network infrastructure, could attract private equity interest.

“Further strategic action by Vodafone to address underperforming assets following recent news of the proposed UK merger should prove sentiment supportive,” noted Grindle, referring to Vodafone’s planned merger with Three.

Vodafone is not the only firm in the Spanish market suffering from high competition with Orange having to strike a deal to merge operations with Masmovil to make savings, allowing it to increase investments.