The Spanish banking sector’s stock market rally has been suddenly cut short. The listed banks’ index had risen over 45% since the minimum levels of June 2016 until the first week of January. But since then, it is seeing a correction. Two matters of concern for investors are the impact of the floor clauses ruling on the banks profit and loss account, as well as the problems of the Italian banks.
Just minutes after the the EU ruling on ‘floor clauses’ was released, the banks in Spain’s blue-chip Ibex 35 index ended up dropping over 10%. But most of the lenders recovered ground by the end of the session. Afi estimates the ruling will affect the banking sector as a whole to the tune of some 4.5 billion euros.
The European Court of Justice (ECJ) has ruled that Spanish banks have to return all the extra money they charged clients affected by the ‘floor clauses’ included in their mortgage contracts. The court has rejected the idea of a time-limited retroactive effect because it is “incomplete and insufficient”.
Banco Santander has delivered €4.606 BN in attributable profits for the first nine months of 2016, down 22.5% from the same period in 2015 due to the impact of extraordinary items announced in Q2 of this year and Q2 of 2015. Excluding extraordinary items and exchange rate movements, profits grew by 8% year on year to €4.975 BN.
The amount of government debt registered in the banks’ portfolios fell to 129.684 billion euros in August, over 5 billion euros below July levels. And it’s the lowest amount of public debt in their portfolios since July 2015.
Francisco López | Lately, the Spanish banks are receiving a huge amount of buy recommendations from analysts. Some experts are asking whether there are some sound reasons to bet on banking stocks now, apart from the fact that the majority of their share prices are attractive.
Norbolsa | CaixaBank posted overall solid figures in the first half to 2016, particularly with regard to its net interest margin.
Norbolsa | Bankia’s (BKIA) interest margin fell more than expected in the first half of 2016, but the lender’s ability to lower provisions and costs offset this to some extent.
Norbolsa | After a disappointing first quarter performance, BBVA’s second quarter 2016 results beat estimates, showing a good performance across the board.
Norbolsa | The change in trend in lending has been the most positive element in the Spanish banks’ first half 2016 results.