Outlooks On Six Spanish Banks Revised To Positive On Stronger Profitability

Spanish banks' profitability significantly improved in 2023, continuing the positive trend seen in 2022. The aggregate domestic return on equity reached almost 11% last year. Although the sharp increase in interest rates certainly supported banks' performance, they also benefited from the lean operating structures developed through more than a decade of downsizing and significant consolidation, combined with tight control over funding costs. Based on our view that these profitability improvements are structural, we see a positive trend in industry risk for the Spanish banking system. We revised to positive our outlook on the following Spanish banks: Caixabank S.A., Banco de Sabadell S.A., Abanca Corporación Bancaria S.A., and Ibercaja Banco S.A., as well as Banco de Crédito Social Cooperativo S.A. and

...- Spanish banks' profitability significantly improved in 2023, continuing the positive trend seen in 2022. The aggregate domestic return on equity reached almost 11% last year. - Although the sharp increase in interest rates certainly supported banks' performance, they also benefited from the lean operating structures developed through more than a decade of downsizing and significant consolidation, combined with tight control over funding costs. - Based on our view that these profitability improvements are structural, we see a positive trend in industry risk for the Spanish banking system. - We revised to positive our outlook on the following Spanish banks: Caixabank S.A., Banco de Sabadell S.A., Abanca Corporaci=n Bancaria S.A., and Ibercaja Banco S.A., as well as Banco de CrTdito Social Cooperativo S.A. and Cajamar Caja Rural S.C.C. (both belonging to Grupo Cooperativo Cajamar). The remaining six rated Spanish banks have stable outlooks. - We affirmed our ratings on all these banks. MADRID...

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