Investment strategy: We include in our portfolio BBVA five values as a single value in the Spanish banking sector even though we have recently revised our downside target price (up 9.0 € / share from 10.2 € / share).
From our point of view, BBVA presents a risk / return more attractive than other financial institutions as Santaneder and CaixaBank, especially after recent falls in stock market.
:: Net profit attributable (BNA) fell -11.8% in the first nine months of 2015 after posting a loss of -1,057 million euros in the third quarter of 2015, the main factors behind their impairment investment in Garanti.
:: A level of exploitation , account P & G shows a positive trend in income (gross margin) showing an increase of + 14.8% (in the first half of 2015 without currency effect vs + 10.7%) than operating costs (+ 12.8% without currency effect vs. + 6.6% in the first half of 2015) and allow the net margin (before provisions) reaches 8,510 million (+ 17.0% in terms comparable vs 14.9% in the first half of 2015).
:: The fall in the cost of risk (provisions down -10.3%; -3.3% with no currency effect) allows the profit before taxes (BAI) register growth + 40.5% (+ 46.8% without currency effect).
:: The bottom of the income statement has been penalized for the purchase of 14.89% in the Turkish bank Garanti (carries an impairment amounting to 1,840 million euros).
Why is the time to invest in these Spanish companies?