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FINANCIALS: Financials - Week in Review

FINANCIALS
BulletCredit Bullets

Another strong week for financials, with the sector 4bps tighter, amidst broadly better than expected results.  US banks continued to do well following their strong results earlier in January.

  • Aareal bank was the standout performer, on little news other than a WSJ article about an uptick in US CRE activity  https://mni.marketnews.com/3Cz37vd. Their recently issued AT1 however continued to struggle after being issued at quite at what we believed was an aggressive valuation point https://mni.marketnews.com/42jsrzY . The AT1 will now screen more attractive following underperformance of the AT1 and performance of the Snr.
  • Deutsche Bank's results were decent but disappointed at the margins, with some niggles around legal expenses most prominent. The improving trend and wider spreads than similarly rated credits make it an interesting name. https://mni.marketnews.com/3PWiUai  The banks expected 2025 issuance will be reasonably high.  https://mni.marketnews.com/40Hu2Ng
  • SEB Group’s results were reasonable, but highlighted some issues that may be relevant for several banks in this earnings season. Lower rates put pressure on NII and CET1 declined sharply amidst the announcement of shareholder rewards. Expenses also were meaningfully higher https://mni.marketnews.com/412KTMd
  • BBVA's results were strong, helped by its EM regions and strong growth in fee income - https://mni.marketnews.com/3ElHdft - their offer for Caixabank is reportedly only weeks away from clearing regulatory hurdles. For their part Caixabank Q4's saw sharply lower NII, as expected but capital generation remained positive https://mni.marketnews.com/42CkpCf
  • Generali’s investor day struck a bullish tone and was well received by market. M&A budget remains €1-1.5bn irrespective of Natixis tie up. https://mni.marketnews.com/40U8RZN
  • Some of the newly issued bonds in January have struggled to keep up with rallies in secondary. We highlighted BFCM's new T2 in particular https://mni.marketnews.com/4hjyWra
  • New Issues slowed around the ECB & Fed meetings. BayernLB issued a Sr Non-Pref and SEB and BAWAG came on Friday with a Sr Pref and a Tier 2 respectively.

 

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Another strong week for financials, with the sector 4bps tighter, amidst broadly better than expected results.  US banks continued to do well following their strong results earlier in January.

  • Aareal bank was the standout performer, on little news other than a WSJ article about an uptick in US CRE activity  https://mni.marketnews.com/3Cz37vd. Their recently issued AT1 however continued to struggle after being issued at quite at what we believed was an aggressive valuation point https://mni.marketnews.com/42jsrzY . The AT1 will now screen more attractive following underperformance of the AT1 and performance of the Snr.
  • Deutsche Bank's results were decent but disappointed at the margins, with some niggles around legal expenses most prominent. The improving trend and wider spreads than similarly rated credits make it an interesting name. https://mni.marketnews.com/3PWiUai  The banks expected 2025 issuance will be reasonably high.  https://mni.marketnews.com/40Hu2Ng
  • SEB Group’s results were reasonable, but highlighted some issues that may be relevant for several banks in this earnings season. Lower rates put pressure on NII and CET1 declined sharply amidst the announcement of shareholder rewards. Expenses also were meaningfully higher https://mni.marketnews.com/412KTMd
  • BBVA's results were strong, helped by its EM regions and strong growth in fee income - https://mni.marketnews.com/3ElHdft - their offer for Caixabank is reportedly only weeks away from clearing regulatory hurdles. For their part Caixabank Q4's saw sharply lower NII, as expected but capital generation remained positive https://mni.marketnews.com/42CkpCf
  • Generali’s investor day struck a bullish tone and was well received by market. M&A budget remains €1-1.5bn irrespective of Natixis tie up. https://mni.marketnews.com/40U8RZN
  • Some of the newly issued bonds in January have struggled to keep up with rallies in secondary. We highlighted BFCM's new T2 in particular https://mni.marketnews.com/4hjyWra
  • New Issues slowed around the ECB & Fed meetings. BayernLB issued a Sr Non-Pref and SEB and BAWAG came on Friday with a Sr Pref and a Tier 2 respectively.