The investor panic spread to BBVA: it yielded up to 5 percent intraday. The Turkish lira signed new all-time lows on Friday, losing 17 percent in a week. More than half signed up in the last session. It is the worst depreciation since 2018. The attack on the currency dragged local markets, which halted negotiations up to two times.
The situation is complicated in Turkey both by the political system and by geopolitical derivatives. This adds sticks to BBVA’s wheels. If its environment is compared with that of Banco Santander, another scenario can be seen given the support for the entity of Ana Botín after the Bank of England confirms that it will raise interest rates.
“We will see how BBVA can take a possible default of the Turkish bank. The situation must be monitored paying attention to the level of provisions. It would be interesting for BBVA itself to explain the situation to calm the investment community, ”says the chief analyst of the Investment magazine, Josep Codina, in the market closing podcast of finanzas.com.
The deterioration of the Turkish financial system carries an extra responsibility for BBVA. As confirmed by Codina, the Spanish entity acts as a breakwater between local banks and the global financial system. If a crisis breaks out, the greatest responsibility for avoiding contagion would fall on BBVA. “In Germany, some entity could have problems, but not to the same extent as BBVA.”
In this context, what can BBVA’s small shareholders do? “We all remember the Lehman Brother crisis,” Codina recalls, “but given the size of the bank, supervisors and regulators would not let the water go big. Furthermore, BBVA will also have its firewalls in place ”.
“If you already have the position and I trust the stock, I would not make rash decisions unless the chart deteriorates significantly.” “BBVA is flirting with 5 euros, but in June it was at 2.5 euros.” “If you’ve held up to those previous levels, you really don’t need to make hasty decisions.”
BBVA, in the last 12 months, accumulates a revaluation of 30.09 percent, according to data from finanzas.com. With these figures on the table, “I would be concerned if the 4.5 euro area were to be lost because the drift would indicate that the stock is receiving a lot of downward pressure.”
Moreover, if the situation calms down, BBVA “could try to exceed 5.20 euros”. This last reference would also be an indication to take positions “and look again for the maximums of the year, above six euros”.