Friday, March 29

The bank recovers the benefits prior to the bankruptcy of Lehman Brothers


Bankinter has given this Thursday the starting signal for a season of results that seems very positive for Spanish banks.

On the whole, profits of entities listed on the Spanish stock market are expected to exceed 20,000 million euros, according to Bloomberg analyst consensus estimates. This figure turns around the losses of 5,000 million euros signed in 2020.

This result would be above the profits that these companies reaped in 2019 (before the crisis caused by the Covid-19 pandemic).

Also, this figure would mean that the Spanish listed banks reach the profits prior to the dramatic crisis of 2008, triggered by the fall of Lehman Brothers.

Banks have changed a lot

This fact is remarkable, since it was It was precisely the financial crisis of 2008 that precipitated the profound restructuring that the sector subsequently underwent. and that meant the drastic disappearance of savings banks.

Although it is necessary to clarify that the comparison is not homogeneous, because the savings banks were not listed on the stock market and their businesses were absorbed by banks whose shares are traded on the parquet.

This is how Nuria Álvarez, an analyst at Renta 4, defends it: “You cannot compare the benefit because the companies have changed a lot, they have merged and they have sold things.”

Although Ignacio Cantos, from ATL Capital, takes a different view: “This reflects that the management of the savings banks was not professional but politicized, where the search for profitability was limited to paying social work and little else. Being within the conglomerate of banks, the management is more professional and the benefit of the entity is sought more”.

Forecasts for banking are very positive

Qualifications aside, the truth is that the banks’ profit forecasts for the 2021 financial year are very positive.

Specific, analysts of the consensus of Bloomberg expect a profit of 7,887 million euros in Santander; 4,388 at BBVA; 5,204 at Caixabank; 393 in Sabadell and 871 in Unicaja.

These gains join the 1,333 million that Bankinter announced on Thursday, giving that sum of more than 20,000 million euros.

Bankinter is the only Spanish bank that has published results (and not estimates) so far, as it is responsible for opening the results season this Thursday.

Bank profits in 2019, below of estimates for 2021

These figures contrast with the benefits of 2019, which were 550 million in Bankinter; 6,515 in Santander; of 3,512 in BBVA; 2,246 million in Caixabank (adding the 1,705 of the entity and the 541 of Bankia); 767 in Sabadell and 283 in Unicaja (the entity’s 172 plus some 110 from Liberbank, with which it merged).

Because the truth is that, apart from the pandemic, the outlook for banks has improved in recent years.

“In 2020 provisions were made, which have not been used in many cases. And the cost of capital has fallen again. As a result, you have more margin. There you can go a little. Then, with the small rise in rates, the banks have a slightly better competitive environment than they used to. And the economy is recovering. Those three legs explain the good behavior that we are seeing on the stock market”, points out Cantos.

Although in the opinion of this expert this good short-medium term evolution will not continue in the long term: “No one expects much from banks because it is a sector that is immersed in structural change and threatened by new competitors such as fintech. But they had been very cheap, we had put ourselves in the worst and that is reflected in the price”.



www.finanzas.com