The Spanish banking sector moves in negative territory this Friday, in a trading day in which the falls of BBVA, which is among the listed companies that yield the most in the IBEX 35, with decreases of around 4%. Something that drags the rest of the entities, which also suffer losses in the last session of the first week of August after a turbulent July.
Of the rest, the titles of Santander and Sabadell around 1.5%, those of Bankia and CaixaBank, about 0.5%, and those of Bankinter, slightly less than 0.2%. "One of the other two great engines of our selective, the banks, do not raise their heads," says the technical analyst of Bolsamanía, José María Rodríguez.
Spanish banks reported to the market last week and there were few surprises. "First half earnings were generally weak, but excluding extraordinary items related to Covid-19 and other factors, could have been worse", they affirm from Scope Ratings.
Analysts point out that some of the international operations of Spain's two main banks have become a source of risk in this crisis. BBVA and Santander have important exhibitions in the US, Brazil and Mexico, where the pandemic is less controlled than in Europe. However, they believe that this time the environment is very different from the last crisis, when austerity and deleveraging were the buzzwords. Now, "governments are encouraging banks to lend with the right incentives, something that just didn't exist in the previous cycle."
Recently, Barclays put the scissors to Santander and Sabadell, cutting your target price up to 2.9 euros and 0.45 euros, respectively. As for Santander, they also lowered their consolidated earnings forecasts by 11%, 10% and 5% for 2020, 2021 and 2022, respectively. "Mainly we cut the revenue forecasts due to lower interest rates, although positively the cost control and the restructuring of Santander should help to maintain profits," they explain. They also foresee that the bank will introduce a small dividend in 2021 due to better creditworthiness.
As for Sabadell, although after the results of the second quarter Barclays' earnings forecasts decrease by 4% for 2020, they increase by 3% for 2021 and 2022. However, they stand out that they see "too many uncertainties on TSB UK's business ".
In contrast, analysts raised CaixaBank's target price to 2.5 euros. Find "attractive" in the entity given that "it is trading below the average multiple of earnings in the sector" and "predicts a higher excess capital than most Spanish banks." Thus, they improve their earnings forecasts by 7%, 4% and 3% for 2020, 2021 and 2022, respectively.