2024-01-13 12:00:19
S&P Global Ratings affirms that the outlook for the Spanish financial sector is stable, with the exception of Banco Sabadell, which stands out for being positive, as well as Cajamar, which will significantly increase its profitability in 2024 after late completing its restructuring plans and efficiency with respect to other entities, which has resulted in its effects being reflected in this exercise.
Otherwise, Spanish banks are in better shape than their European counterparts because there has not been a total revaluation of portfolios, and, furthermore, because the “slow migration” towards fixed-term deposits is containing financing costs.
Likewise, the deterioration in asset quality will be contained in 2024 and business returns will be “solid”, although non-performing assets (NPA) will peak this year after climbing to 5.5%.
The agency has added that Spanish entities have less need to go to the market to finance themselves as they depend more on deposits and because of their “high” liquidity buffers, which leaves them well positioned to face a tightening of liquidity. Likewise, S&P has stressed that financial profitability will be sufficient to sustain the companies’ capital and remunerate shareholders.
At the European level, the combination of a slowdown in the economy with a high interest rate environment will cause some deterioration in portfolios. Credit costs will also grow, but from historically low levels, which can be interpreted as a “normalization” of them. The average profitability will be 8.2% with good results in 2024.
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