Credit Suisse expects Spanish banking to grow moderately and reiterates its preference for CaixaBank

MADRID, 5 Oct. (EUROPA PRESS) -

Credit Suisse forecasts that the growth of the Spanish banking sector will be moderate, but with a "positive slope", and reiterates its preference for CaixaBank, which it considers "one of the strongest banks in southern Europe".

Credit Suisse's analysis of Spanish banking shows that the data for August from the Bank of Spain suggest a "significant strength" of the net interest margin for the third quarter, which "should offset" the pressures that are currently being registered on the asset quality in the face of macroeconomic deterioration.

The report notes that loan volumes grew at a "slow" pace in August, although "significant" increases in credit demand were recorded, particularly in the mortgage and corporate segments, supporting the "positive trend" of banking . "Again, the highlight continues to be the good performance of loan yields, both new production and outstanding."

Specifically, the total volume of loans in August grew by 1.8% year-on-year --compared to 1.5% in July--. Mortgages increased 1.3% compared to August 2021, although new mortgage financing soared 25%. Loans to companies increased by 3.3% and new production in this segment by 60%, recovering from the lows seen in 2021 and suggesting a "renewed need" for non-financial corporations to have liquidity through bank financing.

By contrast, consumer loans fell 1% compared to August 2021, although the demand for new loans increased 10%.

In summary, Credit Suisse observes a "moderate" loan growth, but with a "positive trend" in Spain, together with a strengthening of spreads, which points to an increase in the net interest margins of Spanish banks in the short and medium term.

In addition, although the Swiss bank's analysts acknowledge the effect of risks on asset quality, they also maintain that the "significant growth" in gross income and bank provisions "should more than offset" the pressures on the cost of risk.

Likewise, the experts maintain their preference for CaixaBank, with a target price of 3.9 euros per share. The analysis highlights that it is one of the "most resilient" banks in southern Europe, benefiting from interest increases, with "comfortable" provisions, "conservative" risk allocation and "solid" capital buffers.