Andorran banks back Bank of Spain as lender of last resort; MoraBanc eyes €60m 2025 profit

Andorran banks have broadly agreed to designate the Bank of Spain as their lender of last resort, a consensus industry leaders say reflects linguistic ties and the fact that the main subsidiaries of Andorran banks are based in Spain. The Andorran government had initially favoured the Bank of France, but that option has receded for now, though it has not been definitively ruled out, bankers say. The consensus was confirmed publicly during MoraBanc’s Christmas lunch with the press.

MoraBanc’s CEO Lluís Alsina told reporters the group expects to close 2025 with a profit of about €60 million, a result that could make it the most profitable Andorran bank this year and roughly on par with Crèdit Andorrà. MoraBanc finished 2024 with €57.7 million in profit, implying an increase of around 5% under the current projection. Andbank is forecast to lift profits by about 10%, from €46 million in 2024 to just over €50 million. Crèdit Andorrà, which reported €70.9 million in 2024, is expected to retreat to a level similar to MoraBanc’s projection, though slightly below it. All figures remain projections.

Banking sources attribute the improved outlook to higher interest rates in 2025 and rising mortgage demand, together with generally strong performance across European banks. Those factors have supported increased lending activity and revenue for Andorran lenders.

Alsina also addressed the ongoing negotiations over an association agreement with the EU, saying the financial protocol contains both positive and less favourable elements but that there is no realistic alternative horizon. He stressed that MoraBanc will adapt to European regulation whether or not an agreement is reached. The bank, which currently employs about 550 people, expects to be able to operate in Spain next year with its own licence.

Responding to circulating rumours, Alsina rejected suggestions that Spain’s securities regulator (CNMV) would force Andorran banks to relocate their headquarters to Spain should the association agreement not be concluded. He described that scenario as “a false myth,” stressing that “the three banks are Andorran and will remain so with or without the Association Agreement.” He said the agreement would primarily open capital markets, increase competition by facilitating the entry of EU banks into Andorra, and make it easier to market Andorran funds across Europe, but it would not compel a change of legal domicile. Expansion abroad, he added, is driven by the need to grow in a context of higher capital requirements rather than by regulatory compulsion.