The season of corporate results kicks off in Europe. In Spain it started this Thursday with Bankinter, the rise in profit reflects the awakening of the Euribor during 2022. Its balance is in line with the harvest of historic profits that the market in the sector expects and that banks will take advantage of as an incentive to distribute dividends to their shareholders and gain attractiveness in order to attract new investors.
Specifically, Credit Suisse estimates a return of up to 9%, five percentage points above the market average in the Old Continent, which increases to 4%. If confirmed, it would be an improvement of up to one point in the case of entities compared to 2022, marked by war, inflation and the rise in rates, a scenario that places banks among the winners.
The figure also includes the revaluation that investors can obtain through the repurchase of securities, a formula extended among European banks, but not so in Spain. It was not until last year when the entities ‘cleaned the dust’ of this tool to remunerate the shareholder and attract new investors. At the present time, Banco Santander is the only one that has an active plan for 1,000 million, of which it has already executed more than 80%, as it was released this Thursday.
Precisely Credit Suisse has placed the bank led by Ana Botín on its list of ‘favourites’. Its revaluation potential, the forecast that it will raise its net interest margins in developed markets and that it can improve its commercial sector, especially in Mexico, are some of the factors that lead him to include it on his radar. The market gives its titles a run of almost 30%, up to close to 4 euros, according to ‘Bloomberg’.
The ‘top’ four of the selection is completed by the French entity BNP Paribas, with the expectation that its behavior in the quarter has been better in contrast to the rest of the financial entities; the Dutch company ABN AMRO, in line with its expectations of the good performance of the Benelux banks; and Unicredit, for the total return it offers.
Credit Suisse highlights the major updates to the consensus in the interest income figure for Spanish banks, as well as that of the United Kingdom and the Nordic countries, while the revision has been somewhat more moderate in the case of the German and French banks. The global investment group predicts that the results for the quarter contemplate a significant improvement in the interest margin and values credit quality fourteen years after the bursting of the real estate bubble.
The change in the path of monetary policy towards a more restrictive profile has allowed these companies to increase the cost of financing, contributing significantly to the increase in their profits. After the European Central Bank (ECB) has raised rates to 2.5%, Credit Suisse expects a maximum increase of one point, to 3.5%, a rise that it believes could be executed throughout this first semester, to begin to reduce them in 2024, the year for them to bet on a cut of up to point and a half.
