On Friday, S&P raised its rating on the main Spanish banks by one notch. The decision came in the wake of the rating upgrde by the same agency for Spain’s public debt on March 23, so its “a logical move,” according to Renta4.
The stability in Spain’s growth in the fourth quarter compared with the third is the result of two forces pulling in opposite directions: the strength of the export markets has offset the adverse effect of increased political uncertainty in Catalonia.
Probably the fact they came from Euskadi and were based there is what saved the former Basque cajas (savings banks) from the worst vices which destroyed hundreds of lenders throughout Spain, according to Xabier Sagredo, executive chairman of BBK.
Spanish banks NPLs ratio fell to 8.22% in October, over one percentage point lower than a year earlier. Recently published figures from the Bank of Spain show that the pace of the decline in NPLs accelerated in October, registering an anual 12.52% drop (-11.64% in September).
US commercial banks are trading at a discount of over 25% with respect to the market as a whole (S&P 500) in terms of PER 2018e. Fundamentals are solid and the Fed’s monetary policy heralds a good performance from their profit and loss accounts in 2018 and 2019.
Italy will choose their next government in 2018. Italy is subject to the same four issues present in many Eurozone member states, but with greater intensity: low growth (with productivity gains gone AWOL before the Global Financial Crisis), high public debt, a weak banking sector and political fragility. Improvements on all four fronts have characterized 2017.
Spain is the second country after Italy to benefit from the Juncker Plan, which ends in 2018. There are already 53 operations ongoing, with 4.5 billion euros financing from the EIB, which will facilitate the mobilisation of over 28 billion euros of total investment.
Against a backdrop of unstoppable digitalisation, one of the objectives for the banks at the moment is to find a balance between their physical branches and this new digital approximation which clients want.
Financial institutions, companies and households have continued to adjust the debt accumulated in the first half of the year. In the case of non-financial companies and households, their level of debt is increasingly closer to the European average, against a backdrop of greater economic growth and preference for home ownership.
In Spain banks stocks, particularly Santander, play an unusually important role in driving the index Ibex35.To understand the prospects for the Spanish banks (and ipso facto, the overall index), it is crucial to have a handle on the health of the domestic real estate market,” confirms Goldman Sacha experts.