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.
At the moment, the biggest losers in the Ibex 35 index after Sunday’s referendum vote in Catalonia are the banks, particularly the Catalan lenders. Both Sabadell and CaixaBank have acknowledged that if independence were to happen, they would move their headquarters to another autonomous region in Spain. In this way they would keep their access to the ECB’s liquidity and their clients would remain under the protection of the national and European Deposit Guarantee Fund. But perhaps it’s too soon to ring the alarm bells: while the Ibex dropped, other European bourses rose. This shows that Catalonia is still far from becoming a systemic risk for the EU.
Housing prices have grown 16% since end-2014, according to the Bank of Spain. This is after a decline of 37% in nominal terms (45% in real terms) since their peak at end-2007.
The non-banking sector in Europe currently accounts for 54% of total assets versus 42% in 2008. But interestingly, it’s in Germany and Spain, amongst the big countries, where banks maintain their weighting in absolute terms and in relation to their products.