• Banks provide liquidity and financing.
  • According to Fitch, banks are better capitalized than they were ten years ago.
  • The digitization process experienced by companies in recent years has ensured that remote operations work smoothly.

Due to the unexpected emergence of the SARS-Cov-2 pandemic (COVID-19), the optimistic perspectives predicted for 2020 have been completely reversed, a fact which is affecting the worldwide economy and which will have a relevant impact on national economy.

The Andorran Government has responded forcefully in preventing the spread of COVID-19 and to protect the health of the population while at the same time adopting exceptional economic measures in order to sustain the production system, helping out businesses and families and encouraging a swift economic recovery. It has become clear that health and economy are connected and that the banking industry holds a key role by offering liquidity and funding to the system.

The banks have been ready and committed to a quick execution and support of the economic measures approved by the Andorran Government in order to mitigate the economic effects of COVID-19 and maintain industry production, work places and the support for families as much as possible. The Andorran banks are in a position to offer financing to the Andorran economic system.

At the close of 2019, Andorran banks showed positive figures both in growth and consolidation of the new model. To this fact, we have to add the rating action taken by Fitch on April 20, viewing the Andorran banking sector as more resilient than at the start of the previous crisis in the country in 2011, benefitting from a more specialized management and holding corporate governance policies aligned with international standards.

The solvency of the banks (the CET1 solvency ratio phase-in is 16.98% as of 31 December 2019, higher than the average of European banks) is what will allow us to overcome this crisis with guarantees, for the banks and for the economy in general. Andorran banks provide the Government and society with liquidity and financing in order to overcome these hard times and therefore, have to be a part of the solution in resuming business. From the banking sector we will stand by companies, the self-employed and families so that they are not left behind in this COVID-19 crisis due to liquidity problems.

The banking sector is one of the few that has not stopped its business and has continued to offer its services with professionalism and responsibility, adapting its logistics, products and services in order to guarantee the security of its workers and clients and at the same time cover customers’ needs. Remote channels allow for on-line banking, telephonic assistance and ATM services. After this crisis, it is probable that the client’s new habits derive in a different way of working that is more efficient and adapted to his or her needs.

The next few months will be complex and the entrepreneurial world will need some time to recover from the impact of this crisis. The banking sector will continue at the Government’s side as well as the companies’ side, and will support families to recover the national economic balance.

The banks will continue to perform their role which is to preserve financial stability in these times of crisis, thanks to their solvency and strength. They will continue to stand side by side with their clients, providing liquidity to those companies or families with temporary liquidity problems so they can access financing or deferment of their financial obligations which will help them tackle the difficulties of this crisis. They will also suggest solutions so we can return to normality as soon as possible.

We will get through this!

Esther Puigcercós Font

General Manager of Andorran Banking

Download article from the Diari d’Andorra (in Catalan)