Caixabank | Spanish banks are strongly focused on the retail segment, which provides a more stable source of funding in the long-term. Stable deposits and operational deposits (those that have proven to be harder to withdraw) account for over 60% of total deposits for nearly all Spanish banks. This has contributed both to a positive evolution of profitability in a context of rising interest rates, as well as to a…
Alphavalue/DIVACONS | The headquarters of five banks were the subject of judicial searches in and around Paris yesterday as part of an investigation into aggravated tax fraud, the National Financial Prosecutor’s Office (PNJ) said. According to the daily Le Monde, which broke the news, the banks under investigation are Société Générale (buy, P. O. 35.9 eur/acc), BNP Paribas (buy, P. O. 71.3 eur/acc), and its subsidiary Exane, Natixis and HSBC…
The opinion of the European Central Bank (ECB) on the new bank tax, which is currently before Congress, is already public. The banking supervisor has issued a tough and detailed opinion in which it warns of the negative effects that the tax, as it is designed, could have on the banking sector, such as damage to profitability, competition, solvency and the granting of credit, while warning of the risks of…
Fitch explains that for large US banks “the sharp rise in interest rates across the curve led to unrealised losses in AFS (Available-for-Sale) securities portfolios with an estimated negative effect on CET1 ratios of 20-110bp”. Specifically, according to Bloomberg, JPMorgan reported latent losses of about USD 7.4 billion on a total of USD 313 billion of Treasuries and other bonds in its available-for-sale portfolio in the Q1’22 results announced last…
Aristóbulo de Juan | The Spanish system lends itself to great confusion. It is therefore difficult to diagnose. This situation has been dragging on since the recent real estate bubble and the poor handling of the ensuing crisis. Perhaps as a consequence of the doctrine of deregulation. But this situation continues to be favoured by the existence of an ineffective regulatory framework, based on the elusive principle that it is…
Andrew Fraser (Aberdeen Standards) | They talk, but they don’t do,’ this is how the Queen expressed her frustration with world leaders on the eve of COP26. The same accusation could be levelled at the world’s major banks. They finance the world’s largest companies and have a huge role to play in halting climate change. But the opportunity has yet to be fully grasped. Banks could take a major part…
Aristóbulo de Juan | Visiting the basilica of San Isidoro in León some time ago, I came across a series of tombstones with their inscriptions. One of them carried this statement: “Without numbers you will perish”. It stuck with me. Now, amid the pandemic and its impact on the economy, on banks and on the tolerance of all regulators, we live in a time of great confusion. Banks in good…
Non-performing loans granted by credit institutions to companies and individuals fell to 4.4% in June, compared with 4.55% in May and 4.67% a year earlier, according to provisional data from the Bank of Spain. This is its lowest level since April 2009, when the NPL ratio began its climb – which reached 13% in 2014 – as a result of the financial crisis. Total credit to the private sector increased…
Adam Vettese (eToro) | In the UK on Monday, dividends were in the spotlight as £7.5bn of payments are due from banks including Barclays, HSBC, Lloyds and Royal Bank of Scotland over the next few weeks.
Patrik Lang (Head Equities & Global Equity Strategy, Julius Baer) | Global financials typically outperform when purchasing managers’ indices and bond yields rise. Growing scepticism with regard to the negative interest rates and increasing chances for the beginning of tangible fiscal easing are also potential positives.