Bankinter : Main Q1 2022 figures compared to Bloomberg consensus expectations: Net Interest Income: €4.158bn (+20.5% vs €3.920bn e); Gross Margin: €5.939bn (+15.2% vs €5.418bn e); Net Margin: €3.525bn (+23.7% vs €2.983bn e); Ordinary NAB: €1.651bn (+59.8%); Published NAB: €1.651bn (+36.4% vs €1.235bn e).
Analyst’s view: We expect a positive share price reaction to the results which surprise positively in the most important metrics (activity, revenues and cost of risk/CoR) in all geographies (Mexico, Spain, Turkey and South America). The highlights of the results are: (1) the management team’s guidance for 2022 is positive and revises upwards net interest income forecasts for Spain & Mexico, (2) the efficiency ratio (costs/revenues) is amongst the best in Europe (BBVA: 40.7% vs 45.2% in 2021 vs >60.0% sector average) and (3) credit quality ratios evolve positively (NPLs ~3.9% vs 4.1% in Q4 2021) hence Cost of Risk/CoR is at historically low levels (0.82% vs 0.93% in Q4 2021) and (4) profitability/Ordinary ROE close to 16.0% (15.9% vs 12.0% in 2021) with a comfortable CET1 FL capital ratio (12.70% vs 12.75% in Q4 2021 vs 11.5/12.0% target).
By geographic areas (Q1 2022 NAB in constant terms): Mexico remains the main source of earnings (NAB: €771m; +59.0% vs €671m e). Customer spread widened, commercial activity accelerated (+8.9% in lending) and the NPL ratio declined to 2.96% (vs 3.17% in Q4 2021). In Spain (NPLs: €601m; +62.3% vs €435m e), the rebound in fee income, cost efficiency and the normalisation of CoR (-89.5% in provisions) explain the strong rise in the lower part of P&L account. Turkey (NPLs: €249m; +129.6% vs €159m e) surprised positively because the rise in revenues (+116.4%) offset inflationary pressures (+52.3% in expenses) and NPLs slackened to 6.70% (vs. 7.09% in Q4 2021). South America (NAB: €158m; +68.2% vs €129m e) maintained a good pace of activity (+11.0% in lending) with a low CoR.
