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IBERIAN DAILY 20 OCTOBER + 3Q’22 RESULTS. HIGHLIGHTS AND REST OF PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: BANKINTER, ENAGÁS, NEINOR HOMES, OHLA.

At the end of today’s report, and during the entire results season, we will include a presentation with positive and negative results highlights and previews for the 3Q’22 results to be released over the coming days in Spain.

Day of transition
After several days of gains following the solid start of the US results campaign, yesterday’s session in Europe ended with slight losses, with the IBEX dragged down and breaking its streak of 4 straight days of gains. In the Euro STOXX, Technology and Insurance were the best performers, while Pharma and Travel & Leisure fell the most. On the macro side, in the euro zone September’s final inflation was cut -0.1% to 9.9% YoY, with the core figure remaining at 4.8% YoY. In the UK, September’s inflation rose more than expected to 10.1% YoY, a 40-year high. In the US, housing starts for September continued to show the weakness in the real estate sector, which fell more than expected. September’s building permits, however, rose more than expected. The Biden administration confirmed that it will release 15 M barrels of oil reserves in order to alleviate prices with the mid-term elections looming. The Fed’s Beige Book shows an economy growing at a modest pace with a worsening outlook, but with inflationary pressure and a solid, but cooling job market. Fed member Evans (who does not vote) warned that raising rates above the Fed’s forecast levels would have an exponentially negative impact on the economy vs. a market with the terminal rate now at 5.0%. In China, the PBoC kept 1Y and 5Y loan rates unchanged at 3.65% and 4.3%, respectively. In US business results, Baker Hughes, Nasdaq and Procter & Gamble beat expectations, with Tesla in line.
What we expect for today
The European stock markets would post slight losses, with growth assets penalised by rate hikes. Currently, S&P futures are flat (the S&P 500 ended -0.33% lower vs. the European closing bell). Volatility in the US fell (VIX 30.76). Asian markets are mixed (China’s CSI 300 +0.15% and Japan’s Nikkei -0.7%).
Today in the euro zone the EC will meet, in the US we will learn weekly jobless claims, October’s Philadelphia Fed and September’s second-hand home sales. In US business results, AT&T, American Airlines, Phillip Morris and Union Pacific, among others, will release their earnings. Debt auctions: Spain (€ 5.5 Bn in bonds due 2025, 2026 and 2029).


COMPANY NEWS

BANKINTER. Very strong 3Q’22 results beating expectations and with NII leading the way. BUY
The 3Q’22 results beat expectations in NII (+26.6% vs. 3Q’21 and around +16% expected) thanks to the steepening of the Euribor (the customer spread came in at 2.05% vs. 1.90% in 2Q’22 and the TLTRO contribution) that allowed it to offset the expected rise in costs. Very good CoR of ~35bps, in line with our estimate and with reduced NPLs and € 159 M of Net Profit, +6% vs. expectations. FL CET1 was better than expected at 11.90% (11.85% in 2Q’22). We expect a solid reading. Conference call at 9:00 (CET).