By Jesus Aguado
ALICANTE, Spain, March 23 (Reuters) – Spanish bank Sabadell has little to do with Russia and Ukraine, but will monitor possible indirect impacts, especially from high energy prices on some of its clients, its directors said on Wednesday.
Sabadell CEO César González-Bueno said the bank’s direct exposure is mainly limited to mortgage loans to Russian citizens that have a low loan-to-value ratio, meaning they are low risk.
González-Bueno said that indirect exposure, especially in the form of high energy prices, could be a bigger problem, but that the COVID-19 crisis has given governments and institutions the knowledge and tools to support companies and homes.
One day before the shareholders’ meeting to be held on Thursday in Alicante, the delegate from Sabadell said that the indirect impacts could be more worrying on the energy side, given what the bank will determine competent of its clients have the capacity to moving the higher costs to final consumers.
Spanish banks are generally among the least exposed to Russian credit, with the Bank of Spain estimating that their credit risk is just over €700m ($770.14m).
However, the conflict could be detrimental in the long term, because it could delay increases in official interest rates, according to analysts.
The president of Sabadell, Josep Oliu Creus, said that the bank still does not see problems for economic growth, but for the increase in inflation.
Oliu said he expects the Spanish economy to grow this year and next, but at a slower pace due to the impact of the Russian invasion of Ukraine.
(1 US dollar = 0.9089 euros)
(Reporting by Jesús Aguado; edited by Barbara Lewis; translated by Darío Fernández)