Results Berlen Personal Loan. In the absence of mattresses realities


We continue with the review of the results of the first nine months of the Spanish banks, now the turn of the Popular Bank , which unlike Santander, CaixaBank, BBVA, Sabadell or Bankia, breaks headlines and does not announce an increase in triple-digit benefits, but rather It is presented with a 9.5% fall in profit over the previous year. In the absence of mattresses the realities appear.


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Interest margin: Significant fall in the interest margin of 11.8% compared to a year ago, deterioration in line with the rest of the Spanish financial sector and which means that in the first nine months of the year the Popular Bank has about 250 million euros less profit in your income statement.

How this trend does not begin to revert more or less quickly Spanish banks will have a new problem or a return to reality, because part of this reduction in the interest margin comes from the return of the LTRO credit line of the ECB (cheap money) and its substitution for financing deposits to customers (price limited by the Bank of Spain) but more expensive than LTRO.

So if the trend continues, I fear or I smell that we will have a new LTRO in 3,2,1 …Gross Margin: At the gross margin level, a slight drop in net commissions and a sharp increase in the results of financial operations that contribute almost € 100 million more to the income statement. This is due to the reduction in the ALCO fixed income portfolio that has allowed materializing latent capital gains. The ALCO portfolio theoretically covers the structural risk at the interest rates of the banking business.

In other operating results, we have the extra

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Which includes the surplus derived from the reinsurance of the Popular’s risk life business in Portugal. Thanks to ALCO, that is to say with the sale of bonds, the Popular achieves that its gross margin only falls 3.3%.

Operating Expenses: Commendable containment and even slight reduction of the Bank’s operating expenses. The Popular has carried out a net reduction of 215 offices.

Endowments, arrears and refinancing

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The evolution of the delinquent follows its particular via crucis. In a year from 12,247 million to 17,748 million an increase of 44%, the default rate goes up from 7.84% to 11.84, that said the coverage ratio only drops very slightly from 60.94% to 58, 29% In relation to refinanced loans, the entity has 5,906 million euros of normal credit, 1,426 million euros of substandard and 7,414 million euros of doubtful. The total coverage of these credits reaches, according to the entity, 30%.

It is true that the net increase in delinquents has been three consecutive quarters, which is lower than the previous quarter. We will see what happens in the fourth quarter.

Credit: It follows the trend of the rest of the bank and decreases almost 7% compared to the levels of a year ago. As for valuation, if we go easy at € 4,139 per share, the stock market capitalization of Popular is only 0.68x of its own funds. Others like Bankia are already listed above the value of their own funds.


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