Spanish banks have not obtained smooth financing in foreign markets since Lehman Brothers crunch. It is truth that they have carried out some issues, but drop by drop and at a very high cost. Just an example: 2013 Spanish entities’ maturities reached € 10,000 million, but only 25% (€25,000 million) were financed in markets.
Expectations for present year are better for several reasons: less maturity volume, an improved perception on Spanish economy, a risk premium decrease and so on.
Spain’s banking sector wholesale maturities will reach € 88,000 million in 2014 and € 72,000 million in 2015, according to Afi’s analysts’ estimations. Which amount will entities be able to get in the markets? It is still very soon to make calculations, but experts forecast that more than half of maturities will be obtained by this channnel. Only BBVA estimates to sell around € 7,000 million in bonds and covered bonds.
At the moment Spanish banks sold debt for € 3,500 million last week, with two issues by Bankia and BMN, both nationalised and restricted access to markets. Banco Popular took over on Monday through a 3- years bond issue amounting €500 million, but as soon as the selling started the demand already exceeded €750 million.
Investors’ appetite for Spanish entities also reflect on stock markets’ prices. Banks are leading every day Ibex’s gains since their profit estimations’ revisions trend upwards, and this consequently pushes Spanish banks’ shares to the cheapest.
National banks offer an average discount of 46.3% against 2013. On the other hand, Caixabank prices currently at 59% cheaper than its last three years average price to earnings rate.
Banco Popular also prices at 40% discount and is leading Spanish stock market in the few days of present year, with an appreciation of 26.5%. The company was again best Ibex’s performer on Monday by 6.2%.