Financials Wrap: Broadly Positive

Financials wrap on a busy results day with €IG bank spreads flat in a slightly (+0.7bp) wider market. In equities, SX7P +0.5% against wider equity market down 0.4%.

• Sabadell (Baa1 Pos, BBB+) equity is up over 10% but spreads are barely 1bp tighter on good numbers with upgraded earnings guidance and positive moves in asset quality. The new equity buyback is likely tempering some of the spread positives we see in these figures. Positive for Caixabank, Ibercaja, Kutxa and the two Spanish majors.
  (SAB SM)
• Barclays (Baa1, BBB+) spreads are broadly flat (equity outperforming) on better revenue expectations and improved US card asset quality. Spreads have outperformed YTD so expectations were already relatively high.
  (BARC LN)
• Deutsche spreads are slightly (0.5bp) tighter as CRE and German asset quality news is less bad than feared and IB revenues surprised positively. NII is a little weaker which is a poor indicator for Commerzbank (reporting on 15-May) but that asset quality story is likely to take the headlines, we feel.
  (DBK GY)
• Swedbank and BNP are seeing equity and spreads closer to unchanged. Swedbank is the last of the Swedes to report so there were few surprises. BNP’s figures disappointing on IB revenues (which the market rarely objects to) and more promising on personal & commercial banking – likely a positive for CredAg, BPCE and BFCM of the major French banking issuers.
  (SWEDA SS)(BNP FP)