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.
Unicaja Banco SA is a Spain-based financial institution (the Bank) engaged in the banking sector. The Bank offers services to individual and business customers. Its products and services range includes current and savings accounts, debit and credit cards, consumer and commercial loans, real estate credit, securities brokerage, funds management, leasing, factoring, pension plans, life and non-life insurance, international trade financing, money transfer, as well as treasury, among others. The Bank operates a number of branches in Spain and Morocco. The Bank is controlled by Fundacion Bancaria Unicaja.
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