The British investment bank Barclays updated its estimates on Spanish banking this Monday to adjust them to the new context of lower rates. The highlight has been the reduction of recommendation on CaixaBankwhich goes from buying to maintaining, and about Bankinterwhich advises selling instead of keeping it.
“The domestic business is going to contract between 6 and 7% in the next two years throughout the sector due to lower income, increased costs, provisions and higher capital requirements,” they explain. “We will have to see if lower rates ultimately boost volumes and how banks can manage the reduction in deposits while competing to attract customers,” they add. Barclays has lowered estimates of net interest income by 2% on average for 2025 and another 1% for 2026.
In CaixaBankthe justification is that in recent months it has seen a great rise in the stock market and, in fact, they maintain the target price unchanged at 6 euros per share, which is still leaves more than 10% potential bullish from current levels. “Its multiples are already in line with our assessment of the sector in terms of price/book value and RoTE. We expect its profit to fall slightly over the next two years while shareholders could see a small reduction in their dividend and buyback, although the total profitability will continue above the rest of the sector,” they state.
As to Bankinterhighlight that it shows great sensitivity to interest rates, which, combined with the premium at which it is trading, has caused its recommendation to be lowered to sell. “We see the greatest risk of cutting profit estimates for 2025 and 2026 due to their greater sensitivity to short-term interest rates and the lack of visibility of share buybacks,” they explain. They have reduced their target price from 8.4 to 7.7 euros per share, which leaves little room for revaluation to value. In general, Barclays no longer sees major catalysts for the sector in the remainder of the year since they do not expect “improvements in guidance nor announcements of extraordinary distributions of excess capital”.
The only one with growth
Likewise, the Anglo-Saxon financial company highlights the attractiveness of Santanderwhich they expect to be the only bank capable of continuing to increase its profits in the next two years, until 2026. Barclays explains that the Cantabrian bank continues to trade with multiples below the sector average, offering more resilient profits than the rest due to volumes and lower sensitivity to interest rates in some international markets, exposure to the United Kingdom, presence in high-growth geographies in Europe and special attention to costs. In addition, we expect them to continue amortizing shares after buybacks, which boosts EPS in a scenario of lower rates,” they conclude.
Despite this optimism, they have also lowered their target price to 5.8 euros (from 6 euros). However, this new assessment still leaves an upward trend in Santander of more than 25%slightly above that given by the analyst consensus that includes Bloomberg. It is the only bank in which Barclays now suggests taking positions and is positioned as the best recommendation in the domestic sector.
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