Caixabank Results Preview: Domestic Strength vs. M&A Risk

Caixabank results are due tomorrow (30-Apr). Spreads have performed well, peer bank results have been positive but M&A risk may be the key talking point.

• Indications from Sabadell, Bankinter and today’s BBVA results have been positive for domestic Spanish banking with muted volumes (as the economy delevers) seeing solid margin and asset quality performance. So the portents are relatively strong.
• Caixa (and BBVA) have both been linked with BCP in recent weeks where Fosun, which owns 20% of BCP and is looking to sell assets to delever, is reported to have been sounding out buyers. This deal would make solid industrial logic but M&A is rarely risk-free.
• CABKSM spreads are a little over 40bp tighter YTD, marginally outperformed €IG bank peers and its equity has been a very strong performer (+37% YTD, SX7P +16%), so there’s a lot of expectation built in.
• Results last time around (2-Feb) were broadly in line with consensus but EPS estimates are up around 8% for this year and 3% for next, largely on a greater equity buyback guide. Revenue estimates have moved up around 3%.

Results are due pre-market with conf call at 0930 (London time) at https://edge.media-server.com/mmc/p/ddvj58zo/