A hypothetical merger between Banco Santander and BBVA would mean the largest merger in European banking. It would also have a high return on investment and low integration risk, according to the services firm Alvarez & Marsal and reported by Europa Press. In its latest report called ‘The Pulse of European Banking’, the firm has analysed merger and acquisition opportunities amongst the major European banks in terms of investor return,…
In their “European Banks: At a turning point?”, Morgan Stanley analysts explain that interest rates are still low but seem to have reached their bottom and that they don’t expect any further cuts to depo rates.
Bankinter analysis team believes that the cut in the deposit rate to -0.50% (from -0.4%) further penalises keeping excess liquidity in the ECB. Tiering (or the method of charging in tranches) only partially mitigates the impact with a volume of up to six times the coefficient of obligatory reserves (currently 1.0%) exempt. This favours banks with higher and more internationally diversified ratios of credit investment/typical resources like Banco Santander and BBVA.
Morgan Stanley | We lower profit estimates for Spanish banks at an average 4.6-5% for 2020-2021 given the sensitivity of these to a further flattening of the rate curve as a result of a more dovish ECB.
Banco Santander revealed its 1Q19 numbers. Intermediation margin (NII or margin of interest) € 8.68 + 3% yoy <€ 8.75 bn € e cons. Attributed net profit is 1.84 bn € -10.41% yoy against the 1.83 bn € estimated by the consensus, after a net charge of € 108 M for restructuring costs in the United Kingdom and Poland and assets sale. Ordinary profit has grown in seven of its ten main markets.
Marco Troiano (Scope Ratings) | We assign the rating BBB- to the AT1 bonds of 7.5% of Santander issued in February 2019 for an amount of 1.2 billion dollars.
Alphavalue | During the last decade, Banco Santander has successfully diversified constructing a portfolio of low risk/high growth activities. Although it should guarantee the longevity of the group, it has not translated into profits for smaller shareholders.
Alphavalue | Santander bank just created the Company Landmark Iberia to transfer all the land assets it has due to its exposure to the housing market.
Alex Fusté (Andbank) | There is a notable difference between US and European banks: the stock market pays 35% less for European banks. This claim is confirmed by the price/book value ratio, whose average for the 10 largest banks in the US sector is 1.24, while in Europe it falls to 0.8%. In the case of the two largest Spanish banks, Banco Santander and BBVA, the market price is even lower than the average, given that they show ratios of 0.8 and o.7 respectively.
On Tuesday Banco Santander announced that it will not exercise the repurchase of its contingent convertible bonds (CoCos) – the AT1 – of 1.5 billion euros and coupon of 6.25%. The bank, which referred to financial reasons, had already warned in its presentation of results that it would only make the call if conditions were adequate.