Carlos Dalmau: "Economic recovery will be consolidated in 2021 with the United States as the main foreign market"

The measures that have been taken since the beginning of the coronavirus pandemic earlier this year, the border closures or the blocking of mobility, have had a great impact on foreign trade and therefore on the world economic situation. Following the progressive lifting of some of the restrictions over the summer, a slight economic recovery has been noted which Banco Sabadell hopes will be consolidated over the coming year. The pandemic has also worsened the political situation in some countries that were already somewhat unstable, such as Algeria and Turkey, countries where Banco Sabadell has been present for years. However, foreign trade is not always as affected by this political instability as it might appear. 

How is Banco Sabadell's International Business area experiencing the pandemic and what are the feelings for the coming year? 

The best feeling about how the pandemic is affecting us is the one directly expressed by Sabadell's customers, who have shown that the reduction in mobility following March has had a great impact on foreign trade - exports, imports and internationalisation. Our customers also point out that, from June and July, there has been a reactivation of this, accompanied by the possibility of a progressive increase in mobility. Within this reactivation, there have been sectors of activity that have gone faster than others, but the recovery is undeniable unlike in other crises, in which the foreign market has taken longer to return to normal.

What are the benefits of Banco Sabadell for the internationalisation of Spanish companies? 

Banco Sabadell's extensive experience in foreign trade, which is part of our DNA, helps us to have a vision of the product and to accompany the customer. Banco Sabadell's proposal is to maintain a team of specialists with extensive training and close contact with the client, which allows them to have a greater knowledge of the operation they need to carry out and receive better advice. To achieve this, Banco Sabadell's presence abroad is very important, and it is done mainly through the presence of Representative Offices and branches or subsidiaries. 

What models of international implantation does Banco Sabadell use?  

In addition to the operational office, our main implantation model is the Representative Office. There are currently 16 of them, located in different countries around the world, and their function is to familiarise themselves with the legislation of the country and maintain relations with the correspondent banks present there (Algerian, Turkish, Chinese banks, etc.) in order to help their clients to immerse themselves in each of these countries, carrying out a task of intermediation and accompaniment.  

Is expansion to sub-Saharan Africa on the agenda? 

With regard to the establishment in sub-Saharan Africa, a very close market of growing interest for Spanish companies, in the short term, the physical presence of Banco Sabadell is ruled out for the time being. However, Banco Sabadell does intend to approach specific countries on the continent by forging closer links with organisations and entities present there. 

Does Algeria's instability have any impact on trade relations with Spain? 

We are mainly interested in Algeria's macroeconomic situation and the situation of the energy sector. Apart from this, the limitations on imports into Algeria greatly affect Spanish companies, although there are sectors such as healthcare products, on which the limitations are less strict owing to the coronavirus. 

Does the economic situation in Turkey affect Spain's presence and the activity of Banco Sabadell after more than ten years in the country? 

Turkey is a strategic country on many levels. The current economic situation affects investment more than foreign trade and, in this area, Turkey is a hub that also provides access to other markets in the region for Spanish companies, which makes it even more interesting for short-term commercial operations, which is what we do.

What consequences would this neo-Ottomanism have for the international balance?

In recent years the concept of New Otomanism has been forged, which refers to the recovery of the areas of influence that the Ottoman Empire once had. The Turkish leaders are attempting to turn Turkey into a regional power, which clashes on the one hand with the interests of the Gulf monarchies and above all those of Saudi Arabia, which does not wish to lose its influence and considers itself the ruler of the Muslim world, in clear competition with the emerging Turkish power.

How is the counterparty risk of Turkish banks being quoted on the market, taking into account the country risk? 

It does indeed influence the pricing with risk taking for trade finance operations although there are obviously scales depending on the solvency and shareholding of each entity. With banks considered Tier 1, the variation in prices has not been particularly relevant in the case of Banco Sabadell.

Will the defeat of Donald Trump mean any change in foreign trade with the United States? 

For a large part of Spanish companies, the United States are the main market in general, and will continue to be so in 2021. The change of president will only bring changes in nuances, as the economy is not as affected by the occupant of the White House. We will also notice a better relationship with European countries, which we believe will improve trade, but this will be a matter of detail. 

How important is Latin America for Spanish companies? 

The commercial relationship with Latin America is very good. Our companies know that 98% of the purchasing power is abroad and therefore they have to focus on foreign trade, something that in Latin America is facilitated by the language. Furthermore, there are countries whose economic situation is improving, which, added to the potential of the Spain Brand, creates an attractive cocktail for the business presence in that market. 

What are the prospects for 2021 and what mechanisms will Banco Sabadell use to tackle them? 

As I mentioned at the beginning, health-related products: pharmaceuticals and chemicals, as well as the food sector, such as fruit and vegetables, will be the ones to lead the recovery, although the recovery of the 2019 figures will be difficult to achieve in general, given the uncertainty surrounding the pandemic, among other things. Some of the aspects that Banco Sabadell's experience in helping companies to open up abroad, taking advantage of the coming economic recovery, include the 'Exporting to grow' programme and the 'Sabadell International Business Program'.