Santander, the most solvent, and Sabadell, the least, according to the stress tests
Banco Santander is the most solvent Spanish group of the largest in the worst scenario of stress tests, while on the opposite side, with a more adjusted capital ratio figure Sabadell, according to the data published today by the European Banking Authority ( EBA, for its acronym in English).
The four major Spanish banks - Santander, BBVA, CaixaBank and Sabadell - stand the most severe scenario in the solvency tests, as they are able to maintain at the end of 2020 a capital level of maximum quality CET1 of at least 5 , 5%, the minimum that the market demands.
However, there are differences between the different entities and Santander would have a "fully loaded" ratio - taking into account future capital requirements - of 9.20%, which places it as the most solvent, above CaixaBank, with the 9.11%, BBVA 8.80% and Sabadell, 7.58%.
Unlike in the past, Bankia did not participate this time in the resistance tests because it was immersed in its merger with BMN in 2017 and it was difficult to provide an image of the group to submit to the stress test, so the EBA exempted it from .
In the stress tests published today, to which 48 entities representing 70% of European banking assets have been submitted, there are neither approved nor suspended, although there is enough information for the market and analysts to know the strengths and weaknesses of the different entities.
The tests of the EBA consist of measuring the resilience of the bank to a base scenario in which the economy does not give big surprises and another stressed, really the most interesting, to measure its ability to withstand future economic turbulence.
The four major Spanish banks have had to face a hypothetical scenario in which the Spanish GDP would fall 0.3% in 2018, deepen the recession in 2019 with a decline of 1.5%, to grow 1.1 % in 2020; three exercises in which the unemployment would be superior to 15%.
In the case of the United Kingdom, one of the key European countries for Spanish banking, since both Santander and Sabadell are present, the tests seem to contemplate the worst scenario of the "brexit" with a contraction of 2.8% this year and of 2.2% in 2019; by 2020 the economy would rise by 1.8%.
Less hard now than in the past are the conditions in Latin America, which especially affects Santander and BBVA, since the former holds a scenario in which Brazil's economy falls by 1.8% in 2018, but increases by 0, 4% in 2019 and 3.5% in 2020.
In Mexico, BBVA's main source of income, and where Banco Santander is also located, the economy would fall by 0.8% in 2018 and advance by 0.4% and 3.9% in 2019 and 2020, respectively.
In the case of Turkey, despite the difficulties of the country and the strong depreciation of the lira, the most adverse scenario for BBVA, the main shareholder of Garanti Bank, foresees that the economy will fall by 0.8% in 2018, however, in 2019 it would already rise by 1.9% and by 2020 by 3.5%.
