The CNMC investigates if the six big banks violated competition with mortgages

BarcelonaThe National Commission on Markets and Competition (CNMC) has decided to open disciplinary proceedings against six large banks for alleged anti-competitive practices. These are the six entities listed on the Ibex: Bankinter, Banco Santander, BBVA, Unicaja, CaixaBank, and Banc Sabadell. The body chaired by Cani Fernández, whose six-year non-renewable term ends this Tuesday, is investigating whether these entities engaged in anti-competitive practices related to mortgage policy and, more specifically, the so-called mortgage war, contrary to Article 1 of the competition defense law and Article 101 of the Treaty on the Functioning of the European Union.

This provision prohibits "all agreements, decisions or collective recommendations, or concerted or consciously parallel practices, which have as their object or effect the prevention, restriction or distortion of competition in all or part of the national market [...]". It also relates to the abuse of a dominant position in the market.

The supervisory entity is investigating the making, by some of the executives of these entities, of "public statements on the future commercial policy of the bank related, in particular, to fixed-rate mortgage interest rates", it explains in a statement. These statements, adds the CNMC, "would have allowed entities in the sector to anticipate the future behavior of their competitors".

During the results presentation period, the main executives of these banks stated that mortgages were being granted at excessively low interest rates and even claimed that they would reduce the pace of mortgage lending. These messages, as inferred from the communication from the supervisory body, would have conditioned the evolution of the rest of the market in terms of granting loans for housing acquisition.

The supervisory body understands that these types of public statements, in which the main banks in the Spanish market are involved, "would have allowed entities in the sector to anticipate the future behavior of their competitors". The initiation of this file does not prejudge the final outcome of the investigation. A maximum period of 24 months is now opened for instruction and resolution.

The sector's employers' association, AEB, has argued that the sector "complies with the law". The president of this organization, Alejandra Kindelán, has also added that Spain has the most competitive mortgage market in Europe. "Interest rates on mortgages in Spain are almost a percentage point lower than the euro area average, and this benefits consumers and people who own homes in Spain and have mortgages," she stated in press declarations.

The CNMC's decision has surprised the sector, as some executives "answered journalists' questions at earnings presentations," according to some sources. They also recall that mortgages in the Spanish market are among the cheapest in Europe, and that "this is public data" from the European Central Bank (ECB). According to these figures, only Malta (2.08%) and Bulgaria (2.48%) have cheaper loans for purchasing housing. In Spain, they are at 2.80%, while the euro area average is 3.43%, according to April data. They also recall that mortgages "are not granted for profitability reasons but especially to achieve customer loyalty, because they are long-term loans".