Jefferies Equity Research | Spanish Banks’ 1Q24 earnings season kicks off later this week. We expect focus to remain on the NII print/guidance in a context where rates expectations have moved up YTD. Loan growth still not helping, but in-check asset quality is an offsetting factor. Outside Spain, Mexico’s numbers came relatively solid into early Q1 24 as per CNBV data. In Brazil, loan growth is now flat in real…

The ratings agency Standard & Poors predicts more mergers among medium sized Spanish banks. S&P also 2019 toxic assets on the balance sheets will continue to be reduced and that the main challenge will remain improving profit margins which remain at historic lows. In fact it is this low profitability which will drive consolidation this year which will help achieve synergies, economies of scale and cost cutting.