BBVA, Santander, Caixabank… An X-ray of banking in the face of interest rate hikes | markets

Its international diversification and the notable weight of the retail business in the group play both in Santander’s favor with respect to investors. The entity is a favorite within European banking for firms such as Credit Suisse or Jefferies. For the Swiss firm, geographic diversification continues to be “a key advantage”. The positive outlook for net interest income stands out thanks to rate hikes in Spain, Portugal and the United Kingdom. And he also expects it from the business in Brazil, which is expected to straighten out the business and overcome the deterioration of assets due to high inflation, and in Mexico.

Credit Suisse is also confident in the margin for improvement in management that the new CEO Héctor Grisi can contribute, starting next year, with the aim of “increasing efficiency and profitability while maintaining the focus on optimizing capital ”. As risks, the Swiss bank points out precisely a possible limitation in the ability to achieve excess capital, due to greater market volatility or regulatory developments.

Santander’s shares are, however, far from the 4 euro target price granted by Credit Suisse and the 3.93 euro valuation of the market consensus. So far this year, they suffer a decrease of 10%, although the value is up 10% since the ECB announced the rate hike of 75 basis points.

The value is also a long way from the level prior to the 2020 pandemic, although it includes a majority percentage of purchase recommendations, for 66.7% of the total according to the Bloomberg consensus.


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