Background on Banco Sabadell and its Mexican Operations
Banco Sabadell, a Spanish banking group headquartered in Barcelona, has been operating in Mexico since 2023. The bank’s CEO, César González-Bueno, recently announced that the bank will not pursue an “aggressive expansion” in its retail banking business in Mexico.
Previous Decisions and Current Strategy
In 2022, amidst a transformation process to enhance efficiency and profitability, Sabadell decided to exit the Mexican retail banking sector. However, they maintained their presence in corporate and investment banking. In 2023, Sabadell relaunched its retail banking operations with a digital focus and low-cost structure, as stated by González-Bueno during a press conference.
Current Performance and Future Ambitions
González-Bueno highlighted that the Mexican franchise has been improving daily in terms of costs, return on tangible equity (RoTE), and volumes. The retail banking business is performing well, growing and becoming more profitable. It also contributes a modest amount of liabilities that are relatively inexpensive.
However, the CEO mentioned that Sabadell’s ambition to capture retail liabilities, primarily deposits, is currently on hold. This decision stems from observing increased digital competition from significant players offering unjustifiably low prices to clients.
Openbank’s Entry into the Mexican Market
One of the entities actively capturing deposits in Mexico is Openbank, a digital bank owned by Grupo Santander. Openbank officially launched in Mexico in the first quarter of 2024, following some operations initiated in November 2024.
In February of the previous year, Openbank began offering a deposit with a 10% interest rate to a limited number of clients under the ‘family & friends’ format. By September, Openbank had attracted 300,000 customers and gathered €230 million in deposits.
Key Questions and Answers
- What is Banco Sabadell’s stance on expanding its retail banking business in Mexico? Banco Sabadell’s CEO, César González-Bueno, has stated that the bank will not pursue an “aggressive expansion” in its retail banking operations in Mexico.
- Why did Sabadell exit the Mexican retail banking sector in 2022? Sabadell decided to leave the Mexican retail banking sector in 2022 as part of a broader transformation process to improve efficiency and profitability. They maintained their presence in corporate and investment banking.
- What is Openbank’s role in the Mexican market? Openbank, a digital bank owned by Grupo Santander, has been actively capturing deposits in Mexico since its official launch in early 2024. It has successfully attracted 300,000 customers and gathered €230 million in deposits by September.
