Spanish Banks Lose €9.066 Bn In Capitalisation Awaiting Supreme Court Decision

Eight Spanish banks brands amongst the 500 most valued worldwideThe first quarter was particularly damaging for the banking sector, coinciding with the start of the coronavirus crisis

The financial and stock market situation of the banks has returned to the front page after the Supreme Court decided, re-decided and then postponed its sentence on who ought to pay the stamp duty on mortgages. The decision has caused our banks to lose 9.066 billion euros in stock market capitalisation in a week.

According to recent analysis by the research team at Santander, national banks were registering a relatively good performance until 17 October. In general, Spanish banks were resisting well thanks to fairly encouraging overall second quarter results. But the Supreme Court has thrown it all into reverse. In the last seven days Bankia, Caixabank and Bankinter have fallen up to 10% in value, Unicaja and Liberbank 12% and Sabadell 18%, dangerously approaching the minimums of the Brexit vote.

As Santander signals, the fall of 4% in BBVA makes it seem like a refuge. Thus, according to the analysts, valuations have fallen to extremely attractive levels, but having got to this point, and despite expectations of reasonable results in the third quarter, an appreciation depends almost entirely on a favourable decision by the Supreme Court in its 5 November meeting. If, finally, the banks have to pay the stamp duty, the experts are talking about an impact on the banking sector of up to almost 17 billion euros. We shall have to wait …