July 18, 2024 11:06 GMT
FINANCIALS: Bankinter Conf Call; Three Supportive Guidance Upgrades
FINANCIALS
Bankinter (BKTSM: Baa1/BBB) conf call include three guidance improvements, we feel – giving positive indications for the Spanish domestic lenders (and BCP). BKTSM spreads have tightened more than €IG banks recently, so we struggle to see this going further but this news is, at least, supportive, we feel.
- Loan loss guidance: mgmt guidance is for 35-40bp of loan losses this year and 2Q24 was 41bp (we estimate). The indication is that some of this is “additional seasonality” linked to recent loan growth and that FY24 would still be within the range. This actually implies the outlook, largely Spain and Portugal, is for a second half improvement; a good lateral for Sabadell, BCP, Caixa and the smaller Spanish.
- Spanish loan growth inflection: indications here are that both Spanish mortgages and short term lending are seeing a “pickup”, which is another positive indicator for the Spanish issuers, we feel.
- Net interest income guidance: this is perhaps what the equity market is so pleased with this morning. Guidance is now for low-mid single digit growth this year (from stable) which is quite the upgrade, especially when mgmt is also explicit that cost-income jaws will be generated this year.
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