Friday, September 22

Citi cuts Banco Santander’s wings

Banco Santander’s shares chained three sessions of falls and cooled their explosive start to the year, although increases of 6.7 percent are still recorded.

The slowdown in the market due to the fear of inflation and the disappointing results that began to reach Wall Street, among them those of Goldman Sachs, lowered the euphoric tone of investors with financial entities.

The last investment bank to position itself on the Cantabrian entity was Citi, whose experts resumed the coverage of the value with a ‘neutral’ recommendation and a target price of 3.3 euros, which barely leaves an upward margin of 5.1 percent.

Among the Spanish investment banks are also being felt the doubts generated by Santander Bank. Without going any further, Renta 4 Banco has just removed the value of its portfolio from ‘big 5’, where it is BBVA.

Although in the long term they have a positive vision of the entity they chair Ana Botin, in the short term things change due to the uncertainty generated by a possible corporate operation in Mexico.

BBVA and Unicaja before Banco Santander

Regarding the results of the Spanish banking system whose presentation will begin this Thursday, analysts at Citi they believe that the net profit of the sector will increase 3 percent in the fourth quarter.

These experts expect a strong evolution of fees, which will be driven by asset management, although trends in net interest income will be mixed.

However, profit before provisions for the entire sector will be 1 percent below analyst consensus. For Citi, the best options within the Spanish banking system are BBVA and Unicaja.

Somewhat more optimistic with the sector are the analysts of Barclays, which also have an ‘overweight’ recommendation Santander Bank.

In any case, these experts agree with Citi that one of the key variables to be followed by the market this year will be the evolution of the net interest income throughout the sector, after the benefits of the liquidity auctions (TLTRO) have ended.

Attention to Brazil

Although in rent 4 they are cautious about a possible corporate operation in Mexico, in other investment banks they detect that the danger for Banco Santander will come from Brazil, a market that contributes 24% of the income.

It’s what they think of Swiss credit, given the complicated economic outlook for the Brazilian economy and the uncertainty that the presidential elections will generate.

On the contrary, in Barclays They are much more optimistic about Brazil and point out that the appointment with the polls will hardly have an impact.

What the experts predict is an 11 percent growth in the interest margin, supported by higher credit volumes.

In the United Kingdom, the net interest income will also suffer from the pressure of competition and will show a decrease of 2 percent compared to 2021, as explained in Barclays.

Banco Santander, somewhat further behind

In the last sessions, the price of Santander Bank it was “somewhat further behind because it is fighting to consolidate above the average of 200 sessions”, said the director of analysis at INVERSIÓN y, Josep Codina, on the markets podcast.

The average of 200 sessions goes through 3.14 euros, and according to the experts consulted, it is the next resistance to beat for Santander Bank.

Above this area, “the way is cleared up to 3.35 euros, whose overcoming would leave the option of looking for the maximum of last year at 3.45 euros”, he pointed out. Codina. Exceeding this reference, it would be in a position to continue with the advances in a significant way.

At the bottom, we must watch that the action does not lose 3 euros, which is the psychological zone of reference, although the important support is 2.9. If he loses it he would go looking for the December 2021 lows.