Morgan Stanley | We are expecting a positive surprise in NII (+3.6% QoQ), which will allow for upgrades in consensus estimates for 2023. Meanwhile, in terms of provisions we are expecting stable figures.
We see the best momentum in terms of profits for BBVA and Caixabank (both Overweight) and there could be a catch up in Banco Santander, as the political uncertainty lessens.
Santander – Good numbers in Spain. The focus is Brazil/USA => We expect the provisions in Brazil to have peaked in Q2, starting to fall in Q3. That said, we continue to see un CoR FY of 460 bps, slightly higher than the bank’s guidance.
BBVA – México and Spain are driving the upward revision to profits => In Mexico we expect growth in NII of 2% QoQ, with upside risk. In Spain we see NII growth of 4.5%, also with upside risk. Therefore we expect the numbers in both regions to drive the upwards revisions to profits, despite the uncertainty regarding Turkey.
Caixabank – We expect growth of 3% in NII QoQ thanks to higher interest rates offsetting the impact of the end of the TLTRO bonus. Trading at 0.85 TBV for a ROTE 12% 2023, and with upside in earnings, it remains our Top Pick amongst the Spanish banks.
