05th of June 2005
iPropertyGROUP News
Banks love foreigners
Faced with an increasing number of European tourists purchasing properties in Spain, banks are taking position. This foreign community has reached the 2 million individuals mark, and is forecasted to increase at a 25% annual rate.
Spanish Mediterranean coasts and the Islands have become home to numerous Europeans in recent years. At present, we can already count 2 millions residential tourists, coming from, in their majority, northern European countries, a market, which according to forecast, is growing at a 25% annual rate. This clientele has become a gold mine for numerous financial entities, which see an extremely profitable business with a great potential for growth, since the great majority not only purchase a residential property but also require various banking services during their stay.
The data speaks for itself: Within the last 2 years, 50% of the properties built on the Mediterranean coasts were purchased by Europeans, and according to the Banco de España, foreign investment in 2004, only in real estate, was calculated at 6.674 million Euros (see graph).
This has contributed to an ever-increasing development of banking services for foreigners.
According to Carlos Monserrate, Managing Director of the consultant firm RB Technology, Malaga and Alicante have been two of the provinces were we can register a greater growth percentage within the network of offices between 2001 and 2004.
Although the main Spanish banks have taken measures in order to attract the residential tourists business, primarily pensioners, foreign firms, such as Deutsche Bank, Barclays or Halifax and Solbank (previously Natwest), are better positioned to do so, due to the fact that they already have a lot of these “Euro-resident” amongst their clients in their countries of origin. Current accounts, debit and credit cards, direct debit services, home insurance and mortgages are the most requested services by this community.
Solbank, Banco Sabadell’s specialized brand for “Euro-residents”, plans to expand their offices network by 16% in the Spanish main residential tourists areas within the next 2 years, due to the good response of this type of business. At the moment, they have 88 offices and 162.500 clients, of which 82% are foreigners, the majority being British. These have brought in 4.3 millions profit before tax, to the group, translating into 2.6% of Banco Sabadell’s total profit. “The business opportunity is great, because it is not only the residential tourists, but also the restaurant traders, small and medium companies and Management & Services companies which are directly deriving from it”, quotes Managing Director of Solbank, Aleix Masachs.
This community is also a serious source of new business for Barclays, Deutsche Bank and Halifax. For Deutsche Bank, which have been servicing German nationals staying in Spain for 100 years, the 80.424 “Euro-residents” clients they have, represent a 22% of the total, and the volume managed represent 15% of their private clientele total. Out of 255 offices throughout Spain, 70 specialize in this type of business.
For Barclays, 80 of their 500 Spanish offices are located in Mediterranean coastal areas, attracting great affluence of British tourists.




According to Business Development Director, Hugo Pfyffer, within the next 12 months, the British firm expects to expand their office network by 10% in these coastal areas. The majority of their clientele in Spain is also clients of the firm in the UK. For Halifax, with 13 offices in Spain, out of which 9 are located in Alicante, Murcia and Malaga, this type of clients represent 60% of their total.
Savings banks are also taking measures to attract this market. For the last 4 years, Unicaja, with over 200 offices on the Costa del Sol, has seen an annual increase of 20% on their number of foreign clients. CAM confirms that for the last 12 years they have followed a strong “foreign policy”. Today, they boast 80 “international offices” and foresee new openings.

The key to this business, according to the experts, involves having professional staff well trained to provide sound financial and fiscal advice as well as information on anything to do with daily life.


Source: El Mundo 05/06/2055