Report
Marisa Mazo

The Spanish banking sector: 3Q17 results- Experiencing the seasonal impact of the summer.

 Aggregate results may amount to €3.7bn

Spanish banks may post a +3.1% yoy increase on their 3Q17 aggregate net profit, Caixabank leading the growth rates (+65.0%). We expect that oper-ating trends will be pretty similar to 1H17 although volumes should perform slightly worse due to summer and margins’ compression process would be nearly over.

Earnings upwards’ revisions continues

The aggregated 2017e net group profit of the Spanish banks has been revised upwards +7.7% since December, 2016 (+6.7% in July, 2017). Caixabank lead the upwards revisions since our July report while Liberbank, once again, is the laggard. Recall that Liberbank has been the worst performer in the last quarter.

We downgrade the sector to Neutral

Spanish banks’ prices rose +11.6% since Decem-ber 2016 and +50.9% since June 2016 while the Ibex 35 rose 9.0% and 24.9%, respectively. After this outperformance, we considered that a neutral recommendation is more appropriate on the sector provided (a) the expected slow–down of the Span-ish economy in 2018e and (b) the delay in the rise of short–term interest rates, the clearest trigger of both earnings and market prices.

Underlying
Banco de Sabadell, S.A.

Provider
Bankinter S.A.
Bankinter S.A.

Bankinter S.A. is a Spanish brokerage firm established in 1989. The company's line of business includes the provision of market research and trading services for Equity and Fixed Income products.

Analysts
Marisa Mazo

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