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’BNP Paribas: ‘Avoid Spanish banks for now’
Add the credit analysts at BNP Paribas to the growing list of those concerned about the robustness of the Spanish banks.
In a note published on Wednesday, analyst Olivia Frieser observed, in a comment on the findings of the June 2010 edition of the ECB’s Financial Stability Review,
CDS report: Grinding tighter
Markit’s Gavan Nolan wrote this CDS report
News vacuum helping spreads to tighten
Euro rallying, supporting risky assets
Peripheral sovereigns lagging broader market – Greece 680bp, Italy 215bp (+1),
Equities and CDS, also eurotrashed
European stocks crash-landed toward their close on Friday, countering the gains reached at the week’s start in the wake of the eurozone rescue.
Spain’s Ibex 35 led the way with a 7.2 per cent drop — its biggest daily fall since November 2008,
The deflationary pain in Spain
Ouch. You don’t want deflation when your economy is struggling with huge private debts. So spare a thought for Spain on Friday, where official data revealed negative core inflation.
Flashes via Reuters,
Eurozone bank CDS goes squeaky-pop
Eurozone financial CDS has well and truly tightened from last week’s blow-outs:
Click to enlarge the chart, provided by Markit. Sovereign CDS is also squeaking back.
Spare a thought for those who bought protection late last week…
Santander loses market-cap top spot
Greece-related contagion fears have knocked 23.3 per cent off Spain’s Banco Santander share price since April 16, according to ThomsonReuters data:
Which meant that as of Wednesday, May 5, 2010 Santander was no longer the largest company by market capitalisation on the Ibex 35.
The non-performing pain in Spain goes on, and on
The Bank of Spain released the February data for Spanish banks’ non-performing loans on Monday, and the details aren’t pretty.
Like much else in the wreckage of Spain’s pre-recession property boom, the performance of these banks’ loan portfolios is less than reassuring,
The fight for deposits in Spain
FT Alphaville alerted readers on Tuesday to some of the factors raised in Iceland’s investigative report into the country’s banking collapse.
Appendix 3: Iceland’s failed banks – a post-mortem, by Mark J Flannery of the University of Florida noted the extent to which Icelandic banks had embarked upon measures to raise depositor funds,
The World’s Local (Small) Bank
That’s HSBC, in case you hadn’t guessed (or seen the advertising campaign).
In spite of being the largest non-Chinese domiciled bank in the world by market cap ($180bn), the World’s Local Bank only has double-digit market share in one place:
Cashflow, Spanish banks and ECB support? (Updated & debunked)
Updated with Santander comment below.
We know cashflow doesn’t necessarily mean very much when it comes to banks, but as the figure was missed out in Santander’s unaudited full-year report issued last month,
‘We believe the market might be underestimating the risks the [Spanish] financial system faces’
Straight reporting this.
On Thursday Credit Suisse cut their 2010-2012 earnings estimates and price targets for all the Spanish banks they cover by an average 11 and 7 per cent, respectively. They currently have underperform ratings on purely domestic Spanish banks,
Carry-ing on in Spain
Funding costs. Familiarise yourself with the term.
It’s making headlines on Wednesday, having cropped up late last year, and is likely to continue to be a buzzword this year. The reason? For a start wider spreads on government bonds are feeding into banks’ funding costs.
Comp v market cap – banks around the world
Here’s a fascinating table from Reuters (albeit slightly out of date): a ranking of the world’s biggest banks, along with the salary cheque trousered by their respective chief executives.
Note the comic disparity between Northern American execs and their peers in China.
Santander’s deteriorating ratio
Analysts mostly put a positive spin on Santander’s fourth quarter results on Thursday — interpreting the bank’s rise in provisioning as prudent rather than a signal of distress — but that didn’t stop Santander’s shares sinking on the day.
Presenting the UK’s second most widely held share
Banco Santander:
That’s right. Thanks to the takeover Abbey National and the rescue of Alliance & Leicester, the Spanish bank is the second most widely owned stock in Britain, with 1.8m private shareholders.
Santander’s prudent provisioning, or not?
From Santander’s 2009 result statement on Thursday:
The chart above shows how Santander’s Spanish NPL ratio rose from 1.95 per cent to 3.41 per cent in 2009 and its coverage ratio (loan loss reserves divided by NPLs) fell from 98 per cent to 73 per cent.
Snap news
Breaking pre-market news on Thursday,
- Deutsche Bank reports net income of €5bn for the year 2009, versus €3.9bn loss in 2008 – statement.
- Santander reports annual results and announces large rise in loan loss provisions – statement.
The contagion spreads
Iberian stock markets look to have seen a ghost on Wednesday afternoon:
With financials the hardest hit:
Now, there are plenty of rumours doing the rounds to explain the sell-off; an imminent downgrade of Spain’s credit ratings is one of them.
Santander’s debt rebranding
On Monday, Santander said it was buying back as much as €2.5bn in debt, including hybrid bonds from Abbey and Alliance & Leicester, the British banks it bought in 2004 and 2008, respectively.
That same day,
Ex-Santander exec on Madoff charges
The former head of Optimal, the Geneva-based hedge fund investment arm of Spanish bank Santander, has been charged with criminal mismanagement of client funds placed with fraudulent US broker Bernard Madoff.
Santander can bid for RBS branches
Santander will be allowed to bid for RBS’s network of 312 business-focused branches, under competition rules agreed between London and Brussels. The Spanish banking group owns nearly 14% of the UK retail banking market but has less than 8% of the small-business lending market.
Santander eyes special dividend
Santander, the eurozone’s biggest bank market cap, is generating capital at such a rate that it may have to return cash to shareholders next year through a special dividend, according to Alfredo Sáenz,
Santander raises $7bn in Brazil IPO
Santander of Spain on Wednesday raised $7bn from the listing of its Brazilian subsidiary Banco Santander in the world’s largest IPO this year. The IPO – in which Santander floated 14% of the enlarged capital of its Brazilian business – will be worth slightly more than $8bn if there is extra demand for the shares,
Peak banks
Here’s an interesting little table from the banking team at Citigroup.
That’s right, Standard Chartered, HSBC and Santander have exceeded their historical equity market capitalisation peaks, according to Citi.
Santander in $7bn Brazilian sell-off
Santander of Spain, the eurozone’s biggest bank, on Monday unveiled details of a $6.4bn-$7.3bn share offering by its Brazilian subsidiary, confirming predictions that the issue would be one of the world’s largest IPOs this year.
Santander subordinates on siesta
What’s red and white and doesn’t redeem itself ’till December?
A Banco Santander LT2 callable bond!
Santander’s announcement last week, that it would not be calling one of its subordinated bonds,
Santander to buy back €16bn of bonds
Debt markets gained a boost on Monday when Santander, Spain’s largest bank, launched a programme to buy back securitised bonds with a face value of €16.5bn ($23.6bn). The deal, the biggest of its kind,
Are Spanish banks hiding their losses?
Here’s a somewhat scary view on Spain that came this week from alternative economic research house Variant Perception.
The top line: that Spain is now the hole in Europe’s balance sheet, and that misunderstanding the severity of the crisis will prove costly to investors as it could have profound implications for the European banking system.
UK acquisitions bolster Santander
Santander on Wednesday said it remained on track to match 2008 results as Spain’s largest bank reported a 4 % annual decline in first-half net profits. The lender, the eurozone’s largest, said net profits for the half-year through June were €4.5bn ($6.4bn),