The dividend distribution recommendation and intense talks between the banks and the supervisory authority meant that a good part of the profits earned in 2019 and 2020 contributed to capital strengthening. Reorganizing production and distribution processes to improve the supply of banking services and reduce costs was already a priority before the outbreak of the pandemic, it has now become a necessity.
A number of banks, mostly smaller ones following a traditional business model, have structural weaknesses. In some cases, this is due to inadequate corporate governance and weak internal controls, while in others it is because of their reduced capacity to access the capital markets and take advantage of economies of scale and scope. These banks urgently need to review their business models.