SA News • Thu, Oct. 30
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- BBVA's Spanish operations appear to be recovering, but non-performing loans are still quite high and net interest margins are quite low.
- BBVA's operations in Mexico are stellar not only in terms of market share, but also ROE/ROTE, and the South American operations are good outside of Argentina and Venezuela.
- Spanish banks have rallied strongly over the past year and BBVA appears to be pricing in a near-term return to double-digit ROEs and a long-term return to mid-teens ROE.
Thu, Oct. 30, 12:12 AM
Mon, Oct. 27, 12:52 PM
- “Judging from the market reaction today, investors don’t completely believe in the ECB," says Peter Garnry, head of equity strategy at Saxo Bank. "They are more pessimistic on the banks."
- Financial firms were among the worst performers today following the release of ECB stress tests over the weekend, falling 0.9% vs. the Stoxx Europe 600's decline of 0.6%. Hardest hit were the Italian lenders after that country's banks made up a disproportionate share of those who failed the exams. Not failing, but nevertheless hit: Unicredit (OTCPK:UNCFF, OTC:UNCFY) -2.6%, Intesa Sanpaolo (OTCPK:IITOF, OTCPK:IITSF, OTCPK:ISNPY) -3.1%. Italy's FTSE MIB index (NYSEARCA:EWI) led European declines, falling 2.3%.
- Also taking a hit despite no issues from the stress tests were Europe's larger banking powers: Santander (SAN -3%), Deutsche Bank (DB -1.6%), ING (ING -1.8%), BBVA (BBVA -2.3%).
- EUFN -1.4%
- Previously: ECB stress test failures centered among Italian banks
Mon, Aug. 18, 3:47 AM
- Eurozone banks are expected to borrow about €250B in cheap four-year money from the European Central Bank in September and December under the ECB’s "targeted long-term financing operations".
- The new loans would come on top of the more than €1T in cheap finance the ECB pumped into the financial system between late 2011 and 2012 to avert a financial crisis.
- The new funds are expected to boost lending to the region’s credit-starved businesses.
- Europe’s economic outlook has not been pretty. Last week, figures outlined a slowdown in Germany and France and Italy in recession.
- Related stocks: SAN, DB, IRE, CS, ING, BBVA, BCS, RBS, HSBC, LYG
- ETFs: EUFN
Tue, Jul. 22, 10:28 AM
- BBVA (BBVA +1.6%) says its purchase last night of bailed-out Spanish lender Catalunya Banc will bring in an additional €63B in assets and add an average of €300M ($405M) to its net profit as of 2018.
- BBVA was the surprise winner of the auction to buy nationalized bank, beating rivals Santander (NYSE:SAN) and Caixabank (OTCPK:CAIXY) with a €1.2B ($1.62B) offer.
- BBVA's expansion makes it the largest largest player in Spain's Catalonia region, pitting it against Caixabank, Spain's largest domestic bank by loans and deposits and the dominant player in the northern region.
Thu, Jul. 17, 4:54 AM
- Prior to its takeover of European bank supervision on November 4, the ECB will release collections of data on the euro zone's 128 most important lenders to insure the banks can withstand future crises.
- The published review in the second half of October will outline leverage measures, standardized ratios of non-performing loans and other statistics, giving the banks only two weeks to come up with plans to deal with capital shortfalls.
- Related stocks: SAN, DB, IRE, CS, ING, BBVA, BCS, RBS, HSBC, LYG
- ETFs: EUFN
Thu, Jul. 10, 9:44 AM
- When the going gets tough, the tough suspend trading. Portugal has halted trade in Banco Espirito Santo with the stock off 17.2% on the session and 54% over the last month. At issue are financial troubles for the bank's privately-owned holding company, Espirito Santo International. Its accounts are currently under review by an external auditor who has identified irregularities and concluded the company "is in serious financial condition."
- Santander (SAN -5.8%), UBS (UBS -1.8%), Deutsche Bank (DB -3.1%), Bank of Ireland (IRE -5.6%), Credit Suisse (CS -2.8%), ING (ING -3.2%), BBVA (BBVA -3.1%). U.K. banks: Barclays (BCS -3.8%), RBS (RBS -1.9%), HSBC (HSBC -1.9%), Lloyds (LYG -2%).
- European financial sector ETF: EUFN -2.4%.
Wed, Jun. 18, 2:30 PM
- A Spanish bank pair trade from RBC Capital has the team upgrading Banco Santander (SAN +0.6%) to Sector Perform from Underperform as it downgrades BBVA (BBVA +0.5%) to Underperform from Sector Perform.
- The trade would have worked well thus far this year, with SAN +16% YTD vs. BBVA +5.5%. The future is less certain.
Mon, Jun. 16, 6:19 PM
- ADRs of oil and gas explorer YPF, bank BBVA and Latin America-focused wireless firm NII Holdings (NASDAQ:NIHD) fell sharply today in reaction to a setback for Argentina's defaulted bonds which sent the country's markets reeling, taking select U.S.-listed stocks lower.
- The U.S. Supreme Court today left intact rulings that may force Argentina to pay billions of dollars to holders of repudiated bonds, rejecting an appeal in a case that has blocked the country from international debt markets for more than a decade and could prompt the government to default for a second time in 13 years.
- YPF -11.9%, BBVA -0.8%, NIHD -11.3%, END -14.5%, TGS -10.6%, PZE -8.3%, GGAL -8.1%, PAM -6.6%, APSA -4.2%, NTL -3.3%.
- ETF: ARGT
Fri, Jun. 6, 12:33 PM
- Both Banco Santander (SAN +1.7%) and BBVA's (BBVA +2.5%) long-term issuer default ratings are hiked to A- from BBB+ at Fitch, keeping them one notch higher than that of Spain itself.
- The upgrade "primarily reflects the upgrade of Spain's sovereign rating and related signs of macro-economic improvements in the domestic market. Continued diversification benefits, especially for Santander, support these banks' ratings at one notch above the sovereign rating."
Tue, Apr. 29, 9:39 AM
- Capital shortfalls will need to be covered within six months for those lenders failing under the EBA's baseline stress test scenario, while banks failing under the adverse scenario will have nine months to fix things.
- ECB Vice-President Constancio: "Banks should start to consider what private sources of capital could be raised as a result of this exercise and plan accordingly."
- Earlier: The EBA unveils stress test criteria. 124 banks from 28 EU states are subject to the exams. Among the larger ones: DB, BNPQF, BNPQY, SCGLY, SAN, BBVA, UNCFF, UNCFY, IRE, NBG, CRZBY, CRARY.
- European financial sector ETF: EUFN
Mon, Mar. 31, 12:27 PM
- Absent reforms, another financial crisis is likely to leave taxpayers on the hook for hundreds of billions, warns the IMF, estimating the world's biggest banks receive up to $590B in implicit public subsidies because of their TBTF status.
- Said subsidies include bankers who still have a "heads I win, tails you lose" attitude, and investors who lend at lower cost to banks than they might otherwise. The IMF calculated the size of the subsidies by comparing the CDS prices and credit ratings across larger and smaller banks. While the amount has fallen since the crisis, it still remains sizable. "All in all ... the expected probability that systemically important banks will be bailed out remains high in all regions."
- Subsidies for the biggest players are "like insurance for which banks don't need to pay a premium," says senior IMF analyst Gaston Gelos.
- Full report (starting on pg. 34)
- Among the usual suspects: BBVA, BBD, BAC, BCS, BK, BNS, C, CS, DB, GS, HSBC, IBN, ING, JPM, LYG, MS, NBG, RY, STT, TD, UBS, WFC, WBK.
Wed, Mar. 26, 6:06 PM
- BBVA Compass is approved for semi-annual $51M dividend payments to parent BBVA. (PR)
- As previously reported, HSBC North America was rejected from paying dividends to parent HSBC for "qualitative" reasons relating to weaknesses in its capital planning processes. HSBC N.A. expects to resubmit its plan incorporating enhancements in its processes.
- RBS CItizens (RBS), and Santander Holdings (SAN) were rejected from sending money upstairs for similar reasons, and will be resubmitting as well.
Thu, Mar. 20, 5:07 PM
- Again, all 30 lenders subject to the Fed stress test passed with the exception of Zions Bancorp. Checking the individual results:
- Regional banks passing: BB&T Corp. (BBT), Comerica (CMA), Fifth Third (FITB), Huntington (HBAN), KeyCorp (KEY), M&T (MTB), PNC, Regions (RF), SunTrust (STI), U.S. Bancorp (USB).
- Credit card lenders: American Express (AXP), Discover (see here), Capital One (COF).
- Those controlled by overseas holding companies: BBVA Compass, BMO FInancial, HSBC North America, RBS Citizens Financial, Santander Holdings USA (SAN), UnionBanCal (MTU).
- Trust banks: Bank of New York (BK), State Street (STT), Northern Trust (NTRS).
- TBTFs: See here.
- More on Zions (ZION): The failure likely has something to do with CDOs on its books backed by trust-preferred securities. The bank signaled earlier this year it would likely resubmit its capital plan to the Fed as the test's calculation of its capital ratio wouldn't reflect Zion's planned sale of these.
Thu, Mar. 20, 10:35 AM
- The results of the Fed stress tests on the usual banking industry suspects are expected today, but this year's version includes 12 new companies added to last year's list of 18. Newly subjected U.S.-based lenders: DFS, NTRS, HBAN, MTB, ZION. Foreign-owned U.S. bank holding companies: BBVA Compass Bancshares, BMO Financial, HSBC N.A. Holdings, RBS Citizens Financial Group, Santander Holdings USA (SAN), UnionBanCal (MTU).
- The CCAR results - at which the Fed will give a thumbs up/thumbs down on banks' capital return plans - are due on March 26.
Tue, Mar. 11, 11:33 AM
- The publication of the 285-page manual marks the start of phase 2 of the ECB's review of EU banks which is expected to run until August. The exam will cover €3.72T, or 58% of the banking system's risk-weighted assets. On average, central bank supervisors will review 1,250 credit files per bank.
- The move is part of a process by the EU to harmonize banking practices across borders, break the (often-toxic) link between governments and their banks, and bring credibility back to the sector. Along with this review, the ECB is conducting stress tests for the largest banks.
- Yesterday: German lenders - including Deutsche Bank (DB) - escape the need to revalue their mortgage portfolios.
- Also among those under review: SAN, BBVA, ING
Tue, Mar. 4, 8:01 AM
- Banco Santander's (SAN) debt rating is boosted by Moody's to Baa1 from Baa2 following the agency's lifting of its outlook for Spain (debt upgraded to Baa2 with positive outlook last week).
- "The group's risk-absorption capacity remains resilient despite ongoing asset-quality pressures. At end-December 2013, Santander's problem-loan ratio increased to 5.64% (end-December 2012: 4.54%), mainly driven by the increased level of problem loans in Spain. Despite the negative credit trends in the domestic market, Santander has been able to cope with increased provisioning efforts while maintaining very high pre-provision profitability metrics compared with international peers."
- BBVA's rating is lifted to Baa2 from Baa3.
- Both stocks are ahead about 2% premarket inline with the big rally underway as tensions cool in Eastern Europe.
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