Friday, February 23

Five Bankinter keys that have gone unnoticed


Bankinter has started the results season with some accounts that analysts have liked but that the market has failed to appreciate.

This is demonstrated by the fact that, after knowing the information on the evolution of the company’s banking business, its shares fluctuated between profits and losses, around 5 euros per title.

Specific, The Spanish bank has announced a net profit for the whole of 2021 of 1,333 million euros compared to 317 million in 2020.

The extraordinary ones are what have allowed such a dazzling figure, since it includes the capital gains of 895 million achieved thanks to the IPO operation of Línea Directa Aseguradora.

Some results slightly above expectations

When comparing the results with respect to what is expected by the consensus of analysts, the accounts published by Bankinter reflect an interest margin in line with the experts’ forecasts, a gross margin and a net margin of 3 percent and 2 percent above forecast.

Also, the net profit is 37 percent higher, by collecting provisions to provisions significantly lower than expected by analysts.

“The recurring net profit in 2021 stands at 437 million euros and shows a behavior that supports the objective of reaching a net profit of 550 million euros by 2023”, said analyst Nuria Álvarez, from Renta 4, after analyzing the accounts presented this Thursday by the Spanish bank.

If you look only at the last quarter of the year, the results have also exceeded expectations.

Specifically, the net profit of 82.5 million is above forecasts of 65 million; while the net interest margin was placed at 320.2 million, above the 318.4 expected.

Five points that the market liked

Among the positive factors that the market has failed to appreciate, are these five, which Nuria Álvarez summarized in her first impressions of the entity’s accounts.

1.- In the first place, the good performance of volumes, with credit investment growing by four percent in Spain, with an improvement in the customer margin of 2 basis points to 1.81 percent (although still far from 1 .86 percent in the second quarter of 2021).

2.- In second place, the growth of net commissions of 12 percent year-on-year in the year as a whole in homogeneous terms thanks to the 27 percent increase in off-balance sheet resources.

3.- Thirdly, the drop in the delinquency rate to 2.2 percent (compared to 2.37 percent in the first nine months of 2021), with a credit balance under special surveillance falling by five percent cent quarterly.

4.- In fourth place, the entity’s solvency, since the highest quality capital (CET 1 “fully loaded”) stands at 12.05 percent, above the medium-term target of 11.5 percent ).

5.- In fifth and last place, ROE at 9.6 percent, which is in the right direction to meet the double-digit ROE target for 2023.

For all this, Álvarez believes that (perhaps after these first hesitations) the price will react positively to the results, given the “strong activity shown by the entity and the good evolution of net commissions and provisions”.

Consequently, Álvarez recommends keeping the value in the portfolio and giving it a target price of 5.47 euros per share.

But Álvarez is not the only analyst recommending holding. In fact, the analyst consensus is quite divided in its recommendation on the stock.

Thus, 10 of them recommend buying the company’s titles; 9 keep them and 5 sell.



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