Antonio Ortega: "We must make a plea in favour of the ICO"

The Bankia Deputy Director of People, Media and Technology, Antonio Ortega, considers that financing with endorsement from the Official Credit Institute (ICO) to companies is flowing, therefore he cannot see that there is any 'obstruction or bottleneck', and he has made a plea in favour of the institution, 'which has found itself having to implement some solutions overnight' and has had to develop a platform to be able to implement them.

During the online debate ''What will be the new normal in Spain after the state of alarm', Ortega recalled that the ICO lines opened on 6 April and in 24 days Bankia has paid out 2.8 billion euros. The bank has made this activity compatible with the granting of loans and liquidity lines without an ICO guarantee, in which some 800,000 operations worth 8 billion euros have been carried out.

'We must bear in mind the fundamental objective: to protect and strengthen the economy, and this will not be achieved if there is no clear protection for companies', he pointed out, while emphasising the need for Spanish companies to be in good condition for competing in the European Community market.

In the same way that it is offering financing to companies, Ortega pointed out that Bankia will continue to grant mortgages and loans to families, although everything indicates that demand will fall. 'When the year started, we expected that we might have an increase in (mortgage) production of 7%. As of 13 March, there was a substantial drop in mortgage applications by individuals, which makes us think that production will be around 30% lower', he explained.

He also indicated that a 'reasonable' increase in default is expected, which should not result in a credit crisis, but he made it clear that the non-performing loan rate will not exceed 10%. 'We are addressing this through extraordinary provisions. In this first quarter, Bankia has doubled recurrent provisions to cover its risk cost. We have voluntarily doubled it to create buffers that allow us to face this possible rise ', he said.

The financial sector as one of the solutions to the crisis

Ortega recalled that in recent years the financial sector has undergone a profound transformation that has led it to a sound position of solvency, liquidity and capital today.

'We can now perform the role of financing the economy because we are healthy. We have the possibility of not disappointing in this regard, to fulfil our mission of financing the economy. I hope that the banks will be recognised as part of the solution', he emphasised.

He also stated that since the COVID-19 crisis began, national and community institutions have shown a 'rapid and forceful' response and he highlighted the importance of preserving the income of the most vulnerable people and protecting the business fabric to guarantee employment and the welfare state.

In this regard, he considers that the measures approved by Royal Decree on payment holidays are 'highly appropriate' and come at a time when the financial sector, due to its good solvency and liquidity position, 'has been able to go further by making its own sectoral payment holidays'.

'The goal that we have in common is for the health crisis not to become a profound economic crisis. Everything that is being done should create a substantial retaining wall', he added.