reports
- Suvi Platerink Kosonen
Bank on it/Moody's took action on bank ratings mainly due to revised m...
Moody's announced today it took action on ratings of several European banks across products. Most changes were driven by methodology changes. Changes included some negative OpCo senior/preferred senior changes, and an upgrade of Rabobank. In bail-in senior (HC and NPS) ratings were upgraded among others for Danske Bank, Nordea, OP Corporate Bank, ABN AMRO and NIBC, while Handelsbanken was placed on review for upgrade. Many subs were upgraded. Only Credit Suisse saw a downgrade driven by company-...
- Suvi Platerink Kosonen
Bank on it/BBVA earnings saved by lower credit costs
BBVA this morning reported substantial earnings growth for 1Q21, but as the improvement was driven by lower credit costs, its profitability metrics on a pre-provision basis actually weakened YoY. In our view BBVA currently ranks behind Banco Santander in terms of profitability and (slightly) loan quality metrics. Having said that, due to the expected sale of the US operation the pro forma capital position looks stronger than that of Santander. BBVA trades through Santander in NPS despite its one...
- Suvi Platerink Kosonen
Bank on it/Events in Turkey put BBVA back in the spotlight
The substantial market moves in the Turkish lira this week put banks with Turkish exposures back in the spotlight. As of end-2020, 15% of BBVA's RWA was in Turkey, with its Turkish business bringing in 14% of its net profit. BBVA Group has an active hedging policy for its emerging markets businesses which we believe, together with the group's multiple point of entry resolution strategy, substantially limits the risk of contagion in the group. BBVA is set to offload its US business, a move which ...
- Alyssa Gammoudy
- Hendrik Wiersma
- Jeroen van den Broek
- Nadège Tillier
- Suvi Platerink Kosonen
- Timothy Rahill
- Alejo Rodríguez Cacio
BBVA Argentina: EPS declines YoY; slightly better than in 2Q20.
COVID-19 outbreak impact The decline in average household income and private consumption, the rise of the unemployment rate, and the closure of an increasing number of shops and SMEs, in a context of still high inflation, had a strong impact on overall GDP and on the banking industry business. The nation-wide lockdown established for several months by the federal government in response to the Covid-19 outbreak added another punch to an already-stagnant credit market amid economic slowdown. Re...
- Alyssa Gammoudy
- Hendrik Wiersma
- Jeroen van den Broek
- Nadège Tillier
- Suvi Platerink Kosonen
- Timothy Rahill
- Alyssa Gammoudy
- Hendrik Wiersma
- Jeroen van den Broek
- Nadège Tillier
- Suvi Platerink Kosonen
- Timothy Rahill
- Alejo Rodríguez Cacio
Argentina Banking Sector: H1 20 — Lower activity and Leliq yields hu...
Lower activity and Leliq yields hurt the industry’s earnings. The Argentine banking industry posted a net gain of ARS 117 billion in the first half of 2020, 11% less than in the same period of 2019. Although financial margin rose 36% YoY, there was an 8% decline in securities income, together with a 49% YoY increase in administration expenses. The financial intermediation business continued to lose weight; securities’ income recedes In terms of financial intermediation, financial income grow...
- Alejo Rodríguez Cacio
BBVA Argentina: EPS dropped again in 2Q20
BBVA Argentina (BYMA/NYSE:BBAR) reports results including inflation adjustment, in accordance to IAS 29 reporting and Central Bank norms as of 2020 fiscal year. For comparison purposes, 2019 figures have been restated in constant currency as of June 2020. BBAR posted a net income of ARS 2.6 billion in 2Q20, 70% less than in the same period of 2019, and 22% below 1Q20 figures. As discussed in the full report, the decline in earnings is mainly explained by falling loan interest income, lower se...
- Suvi Platerink Kosonen
Spanish bank majors/Differing views on 2H20 impairments
Spanish bank earnings continued to suffer from high credit impairments as the banks prepare for the Covid-19 effects. So far the credit quality has remained relatively steady despite the weaker outlook. BBVA has perhaps been more aggressive in its provisioning, meaning that in 2H20 its credit costs are likely to somewhat recover. Santander may have further elevated loan loss quarters in the pipeline for 2H20. Both banks improved their capital metrics and the headroom towards their MDA restrictio...
- Alejo Rodríguez Cacio
Argentina Banks: Lower level of activity and Leliq yields hurt industr...
The Argentine banking industry posted a net gain of ARS 73 billion in the first four months of 2020, 46% lower y-o-y. Although financial margin rose 35% in the period, there was a 2% decline in securities income, together with a 25% YoY decrease in net fee income. THE FINANCIAL INTERMEDIATION BUSINESS CONTINUED TO LOSE WEIGHT; SECURITIES’ INCOME STARTS TO RECEDE In terms of financial intermediation, during the first four months of 2020, the growth of financial income (22% YoY) greatly outpac....
- Alyssa Gammoudy
- Hendrik Wiersma
- Jeroen van den Broek
- Nadège Tillier
- Suvi Platerink Kosonen
- Timothy Rahill
- Alejo Rodríguez Cacio
Banco BBVA Argentina SA: Weak Q1 20 results on lower loan and securiti...
BBVA Argentina (BYMA/NYSE:BBAR) started to disclose its inflation adjusted results pursuant to IAS 29 reporting and Central Bank norms as of 1Q20. For comparison purposes, the information corresponding to fiscal year 2019 has been restated in constant currency. BBAR posted a net income of ARS 3.1 billion in 1Q20, 20% below 4Q19 figures, and 36% less than in the same quarter of 2019. 1Q20 earnings excluding results generated by the sale of the bank’s stake in Prisma would have been 6.9% lower ....
- Suvi Platerink Kosonen
Spanish bank majors/Covid-19 to test the limited capital buffers
Spanish bank earnings dived in 1Q20 as Banco Santander and BBVA took large provisions to prepare for Covid-19 effects. Both Santander and BBVA have strong pre-provision profitability, and their earnings are supported by diversification benefits. BBVA's pre-provision profit developed more strongly, but it took a larger impairment provision for Covid-19. BBVA has a larger corporate book, but its loan loss guidance provides confidence on future provision developments. Santander earnings development...
- Alyssa Gammoudy
- Hendrik Wiersma
- Jeroen van den Broek
- Nadège Tillier
- Suvi Platerink Kosonen
- Timothy Rahill
- Alyssa Gammoudy
- Hendrik Wiersma
- Jeroen van den Broek
- Nadège Tillier
- Suvi Platerink Kosonen
- Timothy Rahill
- Alyssa Gammoudy
- Hendrik Wiersma
- Jeroen van den Broek
- Nadège Tillier
- Suvi Platerink Kosonen
- Timothy Rahill
- Suvi Platerink Kosonen
European banks/How deep is your NPS need
We take a look at the European banks bail-in senior issuance plans for 2019 after the lively start to the year. We continue to see value in bail-in senior paper over preferred senior debt and note that several banks are already very well positioned in terms of their full year issuance plans.
- Hendrik Wiersma
- Jeroen van den Broek
- Job Veenendaal
- Nadège Tillier
- Suvi Platerink Kosonen
Coffee, Croissants & Credit/CSSP, BNP Paribas and BBVA
A big number in terms of recent behaviour for CSPP last week, with settlement out to last Friday the portfolio grew by €800m on the week, above its recent trend of €600m and to add to the number most was done in secondary markets. Just two new issues were added, and both these are small in size so assuming allocation of 10% then CSPP added some €60m through primary and a bumper €740m through secondary, easily the biggest secondary week for months. And looking at spread behaviour over the...
BBVA : Keep calm while Turkey on; Opinion and Recommendations maintain...
The already difficult environment in Turkey worsened further early August following diplomatic tensions with the US and sanctions imposed on the country by the US administration. These added to the concerns about an overheating economy, soaring inflation and currency depreciation which were already there in May when we published our latest report on BBVA, but to a (much) smaller extent. Indisputably, the situation in Turkey is acute; S&P and Moody’s downgraded on 17 August Turkey...
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