The senior market analyst for the eToro platform, Javier Molina, has expressed his thoughts on the Spanish banking situation, which has presented its balance sheets for the first quarter of this 2023.
In general, the analysis of the results presented by the Spanish banking sector during the first quarter shows a positive trend.
Although the bank tax has had a negative impact, particularly in Santander and Sabadell, revenues have experienced an increase thanks to the interest rate differential, says the expert.
In addition, the efficiency ratio also remains very healthy, which indicates that the sector is doing a good job in managing your costs.
It is positive that there is no increase in arrears and that interest coverage ratios remain at acceptable levels, says the analyst.
Furthermore, it suggests that banks are managing their credit risks well. Similarly, it indicates that the CET1 capital strength ratio is above 8.75 levelswhich shows that the entities have an adequate solvency margin to cope with potential stressful situations.
However, although the balance sheets seem to be prepared for stressful situations, such as the one experienced in March in the US, it is necessary to continue monitoring the situation closely.
Regarding the quotes, The Ibex 35 Banks has risen 24.53% from the lows of October 2022, which is a positive sign. Although the sector has not reached the highs of 2018-2019, when adding dividends, the situation is at better levels.
However, the analyst points out that it is important to continue to closely monitor the situation, especially regarding the ability of balance sheets to withstand stressful situations. In terms of prices, the Spanish banking sector is at an interesting moment, although there is still room for improvement.
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