BofA sees net interest income, M&A in focus for Spanish banks in Q2 earnings
Bank of America Global Research expects the focus to be on net interest income and mergers and acquisitions for Spanish banks going into second quarter results, with solid operating trends likely
Brokerage sees NII to be broadly stable quarter-on-quarter and about 1%-2% ahead of consensus despite lower rates and expects mortgages and consumer finance to drive loan growth
M&A will be in focus as the economics of the BBVA-Sabadell BBVA.MC, SABE.MC deal are diluted because of a 3-year merger prohibition
BofA believes that the deal is strategic, but it's only financially accretive under certain conditions, as a 3-year delay on a legal merger suggests IT synergies of only 300 million euros in the short-term, which would be equivalent to around 1% earnings per share accretion
BofA expects a solid quarter from BBVA mainly in Spain and Türkiye, while the bank will have a chance to define the boundaries of its commitment to Sabadell's offer
In the broker's view, Caixabank CABK.MC still offers the best combination of NII gearing, non-interest income growth and capital distribution among the Spanish domestic banks
BofA expects Caixabank to announce another 0.5 billion euros buyback in Q2 and improve guidance
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