Donald Trump will return to occupy the White House for the next four years and Spanish banking entities are not digesting this news well. with an average drop in the Ibex Banks of 4.5% on Wednesday, one of the largest in a single session since the beginning of the year. BBVA leads these declines with losses that exceed 6%.
This reaction is completely different from the picture of the rest of the European stock markets, with prices tinted green today. “Companies in the energy and banking sectors thus react, with caution and declines, to the possibility of a return of Trump to the White House and to the risk of a global trade war that could affect the European exportsin case the future Republican president implements significant tariffs,” highlights Sergio Ávila, IG analyst.
From “So companies financed by these entities that export directly to the United States will likely see a reduction in their exports due to tariffs.”
The firm indicates that the fact that BBVA is the biggest victim is due to the fact that Mexico accounts for half of its net profitwhile 80% of its exports go to the United States. “On the other hand, around 40% of Santander’s net profit comes from South America and Mexico, with important exports to the United States and therefore also affected by tariffs.” Thus, after Trump’s victory, the reduction in economic activity internationally will affect all banks. This is “another factor by which we can see that the drop that Donald Trump’s protectionist measures could generate in global economic growth, and specifically in Europe, which could be 1% of GDP next year, forces the ECB to cut interest rates more aggressively than expectedaffecting the results of the entities in the sector”.
The currency effect is another of the reasons pointed out by Antonio Castelo, iBroker analyst. “A Trump victory would especially harm the currencies of emerging countries, something that would harm BBVA especially, due to its exposure to Mexico and to a lesser extent to Turkey. Santander could also be harmed in this way, but, having a significant presence in “The United States could benefit from Trump winning the elections, since his policies tend to favor financial deregulation,” he indicates.
“The market senses that, if the business in Mexico weakens, it could have more difficulties in carrying out the takeover bid for Sabadell and that is why Sabadell’s shares are also very punished, since its price would, in some way, depend on the BBVA’s price when the payment was made in shares. BBVA has been so involved in the Sabadell operation, saying that it is necessary to balance its important business in Mexico (55% of the total), if the operation does not go ahead or if BBVA buys it. canceled, the market would punish its price,” adds Castelo. “It also seems to me that the market is not taking into account that Banco Santander, having a significant presence in the United States, could benefit with Trump in the presidency, since his policies tend to favor financial deregulation,” he explains.
Furthermore, the expert believes that another reason that is affecting the prices of the Spanish banking sector is “the negative impact that the effects of Dana may have on its business, which the Bank of Spain valued at 20,000 million euros.”
At mid-European session, Bankinter already lost 2.8%, Banco Santander 3.4%, CaixaBank 4%, Unicaja 4.6%, Sabadell more than 5% and BBVA lost more than 6%.
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