The renewed strenght of the Andorran banking

Andorran banking has consolidated its position as one of the Principality economic drivers. This has historically been the case and it will remain so, according to the study published in January in the Andorran Banking Observatory from the Andorran Banking Association on the financial sector’s contribution to the country’s economy.

This would not be headline news were it not for the numerous challenges and obstacles that had to be overcome: the 2010 economic and financial crisis; the critical episode with BPA in 2015, with the public perception that it caused in terms of trust in the Andorran financial system as a whole; commitments to transparency and international cooperation, which dispensed with the country’s consideration as a tax haven and banking secrecy in 2016-2017; and the 2021-2021 pandemic, with its severe impact on healthcare, the economy and society. A lot has happened in a short time. In spite of it all, Andorran banking has been able to adapt and has proven its resilience. It has managed to adapt and embrace new opportunities.

This year will be key to our country’s future, with the already advanced negotiations to sign a new association agreement with the European Union, which I will refer to at the end of this article. I am proud to say that, with the data of the Andorran Banking report that has just been published, our banking system is once again a fundamental pillar of Andorra’s economic development, both for individuals and businesses, contributing decisively to the construction of a sustainable economic system.

I will mention just a few figures from the report, which corresponds to 2022. The growth of Andorra’s financial sector in recent years has made it the third private sector that contributes the most to GDP, at more than 14%. Domestic financing granted overall is equivalent to twice Andorra’s GDP. Over the last five years, banking sector assets have maintained a growing trend. Customer deposits and loan investment have also grown. Solvency and liquidity are above the European average. Despite the concentration process in the sector, employment has remained stable. Digitalisation and technological advances have been pivotal to the evolution of the banking sector.

These are but a few of the excellent findings of the report. Now it is time to talk about expectations. In this regard, I am convinced that the association agreement with the European Union will provide another major step forward, as this agreement will lay the framework for our economic and social model. It can only bring us good things. We currently have the same obligations as the banking sector of any EU country, but none of its advantages. The agreement, on which a global political consensus will be needed, should not only involve a political debate, but the acceptance, by all, that it must serve as the framework underpinning the model of country we want for the coming decades. And I understand that this must come about on the basis of political and social consensus.

Published in Dinero – La Vanguardia 10.03.24