UNICAJA: APPROVAL OF THE INTERNAL MODEL IN RETAIL LOANS (ANÁLISIS BANCO SABADELL)
UNI has just announced the approval of the internal model for the bank’s retail portfolio on a standalone basis, meaning a positive impact of +200bps on the bank’s CET1 (15.1% as of Mar’21, with the reduction of around € 3 Bn of APRs).MARKET IMPACT
Very positive news, as the impact is greater than expected. Based on our estimates, the approval outlined would have an impact on the proforma post-merger CET1 of around +100bps to 13.6% vs. around +50bps previously expected. We expect a positive share price reaction, which has seen a negative performance in the past 15 days (-13% since 13/06 and vs. -1% Ibex) due to the press article released by El Confidencial on the ECB’s inspection of Liberbank, which generated doubts on a possible merger breach, which we rule out after contacting both banks. Our T.P. for UNI of € 1.21/sh. includes the estimated impacts from the merger and yields around +40% of upside.
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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