Report
Esther Castro ...
  • Maria Paz Ojeda
EUR 200.00 For Business Accounts Only

BANKING SECTOR: ECB DECISION ON DIVIDENDS (ANÁLISIS BANCO SABADELL)

ECB lifts ban on dividends, but with limits
Yesterday the ECB announced it will lift the ban on dividends for the entire sector, but limiting DPS in cash/buybacks to the lesser of: (i) 15% of accumulated Net Profit’19-20 and (ii) 20bps of capital. This criteria will be held in place until 30/09/21, and the banks will not be able to pay a DPS against 2021 results until then. We expect a neutral/negative reception to the news, as the criteria are slightly stricter than expected and the implied yield BS(e) is not appealing enough (~1.6% on average, with a range of 0.9%-3.3% in our coverage universe) to maintain the outperformance (+20% vs. EuroSTOXX over the past month) in a sector that we think is already fairly priced by fundamentals. By banks, the most positive reading (maximum yield and DPS vs. consensus) would be for Unicaja and Liberbank, whereas on the negative side we would highlight Bankinter. In the rest of the banks we do not expect a significant impact.
Underlyings
Banco Bilbao Vizcaya Argentaria S.A.

Banco Bilbao Vizcaya Argentaria is an international financial group, engaged primarily on providing banking services and consumer finance to private individuals and businesses in Spain and Portugal; providing real estate activity in Spain; providing services to international companies and investment banking, capital markets and treasury management services to clients; and providing the banking, insurance and pension businesses in Mexico and the U.S., as well as in South America.

Banco Santander S.A.

Banco Santander is a holding company, providing a range of financial products. Co.'s products and services include: retail banking business that covers all customer banking businesses; wholesale banking business; as well as asset management and insurance business. Co.'s principal operations are in Spain, the U.K., Portugal, Germany, Italy and Latin America. As of Dec 31 2014, Co.'s total assets amounted to Euro1,266,296,000,000 and total customer deposits amounted to Euro647,627,000,000.

Bankia S.A.

Bankia is a financial institution based in Spain. Co. is primarily engaged in operations in the banking sector. Co.'s business operations are structured into seven areas: Retail Banking, Business Banking, Private Banking, Asset Management and Bancassurance, Capital Markets and Holdings. Co. offers financial products and services to various customer segments, such as individuals, small and medium enterprises, large corporations, as well as public and private institutions. As of Dec 31 2014, Co. had total assets and total customer deposits of Euro233,648,603,000 and Euro106,806,698,000 respectively.

Bankinter SA

Bankinter is the parent company of a group engaged in banking activities. Services provided include: investment banking; capital market services; financial services insurance; international services such as foreign exchange transactions and travelers' checks; wholesale corporate banking; and retail and private banking services. Co. offers its products and services through the following channels of distribution: branch network; telephone banking, interactive (software) banking; agents; and Internet banking. As of Dec 31 2014, Co. had assets totalling Euro57,332,974,000 and deposits totalling Euro29,966,129,000.

CaixaBank SA

Caixabank is an investment company based in Spain. Co. is involved in investment portfolio management activities across two areas: Services and Financial Business and Insurance. In the services area, Co. provides investment solutions for companies involved in the infrastructure, energy, services and entertainment sectors. In the financial business and insurance area, Co. is engaged in the investments for international banks, insurance and specialist financial services. Co. focuses most of its banking investments in India, China, the U.S., and Central and Eastern Europe with a particular interest in retail banking. Co. is also involved in the disinvestments activities.

Unicaja Banco S.A.

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.

Provider
Sabadell
Sabadell

Analysts
Esther Castro

Maria Paz Ojeda

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