European banks

Markets 20th September 2019

46% of liquidity in ECB exempt of depo rate: periphery banks benefit most

Santander Corporate & Investment | Although the new deposit rate that is applied to bank liquidity in the ECB has increased 10 bp to -0.5%, the new tiering system will compensate for this increase and allow the European banks to reduce the interest from the previous -0.4% to -0.27%, as some 750 Bn€ remains exempt of payment (considering that part of the total of 788 Bn€ which supposes 6X the current reserve requirement of 131 Bn€ exceeds the excess of reserves of countries like Italy).

Markets 30th July 2019

European Banks Strategy: Buying bank bonds brings benefits but banishes balance, breaks behaviours

BofAML | A new Asset Purchase Programme may need new asset classes and the EUR460bn bank bond market fits that bill. We see bank bond buying as immensely complex and involving elevated levels of moral hazard. A market already featuring negative yields and Greek Tier 2 issuance does not need ECB intervention to function

Markets 19th June 2019

European banks have 44bn€ invested in software, which supposes a capital charge of 55 bp

The new capital requirements regulation (regulation CRR2 and directive CRD V) could improve the capital levels in European banks through its treatment of software intangibles, according to Morgan Stanley analysts. The changes would not come into effect until 2021/2022; depending on what the EBA says in 2020.

Markets 30th May 2019

European banks: company credit growth registers highest growth rate in 10 years

Bankinter | The private sectors credit stock increases +3.4% in April (vs +3.2% before). A strong performance in company credit stands out (+3.9% vs 3.6% before) as well as credit for buying houses (+3.6% vs +3.5% before).

In Europe 5th May 2019

What is leading European households and companies to increase their deposits?

Spanish Banking Association | According to the ECB, Eurozone deposits grew at 5% in March, the fastest recent rate. The growth rates for household and company deposits coincide at 5.7%. The deposits of public authorities grew above 11% in March.

Ibex 25th April 2019

Deutsche AM, one of the investors of reference in Santander (exposure +1,03%)

Bankinter | The investment funds managed by Deutsche Bank Asset Management (DWS) have increased their exposure to Banco Santander (SAN). It is good news as it demonstrates the interest of international investors in the Spanish bank at its actual prices.

Markets 24th April 2019

Mystery behind European Banks vs Utilities PER differential

In April 2018 both banks and utilities had practically the same PER, around 12.5. Since then there has been an extreme relative movement between them, with electricity companies getting more expensive and banks cheaper, analysts at M&G Valores point out.

Markets 12th April 2019

TLTRO III could offer 0% or negative interest to banks which transform liquidity into loans

Link Securities | Members of the ECB´s Council are inclining in favor of compensating banks for loans to individuals and companies, although they are skeptical about offering lenders relief for the charge they receive for their idle balances.

In Europe 30th March 2019

European banks could reduce the bill of 7 billion euros for the excess cash in the ECB deposit account

Intermoney | The president of the ECB opened the door to further stimulus if the economic and inflation perspectives in the Eurozone remain low, in the shadow of a scenario dominated by downside risks for activity. In fact, he recalled that “there is no lack of instruments” to fulfill his mandate, at the same time as he is contemplating new delays in raising interest rates. Textually he said: “we are assured that monetary policy continues to accompany the economy, adjusting our orientation on interest rates to reflect the new inflation perspectives”.

Markets 20th March 2019

US banks vs European banks: Why such a gap in returns

Ofelia Marín Lozano | Why in the last 11 years, an investor in the American banking sector has obtained a positive profitability of 70%, whereas an investor in the European banking sector has obtained a negative return of 60%.

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