Analysts at Bankinter offer an investment strategy for the European banks ahead of the new year. Overall they reiterate their recommendation to maintain a structural position in banks due to the improvment in the quality of their balances and the recovery in business volumes.
European banks unproductive assets
Banco Popular has hugely damaged the reputation of the Spanish banking sector and its European counterpart after reformulating its 2016 accounts just two months after making them public. Investors are penalising the listed banks as the sector’s credibility is once again being questioned.
According to Moody’s, the markets where there are the highest possibilities of integration are Spain, Italy, Germany and Austria. Unlike Italy’s banks, Moody’s believes the Spanish lenders are under less pressure to reduce their unproductive assets, thanks to the improving economic cycle and increased profitability at the operating level