BANKING SECTOR: ECB DISAPPOINTMENT THROTTLES CAPITAL RELIEF (ANÃLISIS BANCO SABADELL)
ECB Disappointment Throttles Capital Relief.The ECB has expanded its asset purchase programme by € 13 Bn, cut by -25bps the TLTRO III rate and activated an additional LTRO auction. On the banks side, it freed up regulatory capital (removing the -2.5% CCB and the P2G –not made public– from CET1, and pointing to article 104 CRDIV). This will give banks leeway to absorb NPLs. The measures announced today come up short, mainly on capital side (the key lay in greater flexibility in the provision calendar) and because the asset purchase programme is disappointing in quantity (far from the acquisition level in 2016) and quality of the assets (lack of other assets such as financial debt or equity). From this point on, coordinated and robust fiscal and regulatory actions will be needed. Meanwhile, although these measures will not act as a catalyst, they should not lead stock markets to fall.
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 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.
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