Bankinter’s results are so much better than expected, even competitors are surprised

By Tania Suárez, in Madrid | Bankinter, with €59bn in assets, is the smallest of the Spanish listed banks but it has surprised everyone with its brilliant results. Net profit at the end of 2011 amounted to €181.2mn with an improvement of 20% compared to 2010. The gross margin was of €1,104.48mn, an increase of 0.20% year on year. Its income before provisions grew by more than 2.9% compared to 2010 and reached €459.56mn.

Bankinter’s credit profile is better than the industry average and it has an outstanding solvency. According to data analysts at Ahorro Corporación Financiera, under Basil II, Bankinter has a core capital of 9.2% (an improvement of 244 basis points vs. 2010) and a level of 8.6% under the EBA criteria (the entity will reach 9.0% in 2012). However, it is not listed among systemic entities that are subject to the requirements of the European Banking Authority.

Bankia analysts point out that its debt maturities total €1.7bn, which compares very favourably with a potential discount of the European Central Bank of €5.3bn and indicates the absence of wholesale refinancing problems.

Renta 4 sees in Bankinter several opportunities and strengths such as its increasing presence in small and medium enterprises; the good performance of its insurance business (Linea Directa Aseguradora), which provides it with a good business mix, or its margin that would allow it to benefit from a cost reduction.

According to estimated results for 2012, Bankinter trades at a P/NAV of 1.0X and a dividend yield of 3.2%. Bankia analysts believe that

“with these stock market ratios, its positive prospects and low risk profile are amply discounted.”

Experts at Santander consider it to be

“the bank with the best credit quality due to its limited exposure to the developer/construction sector.”