Spanish Banks' Q2 2024 Results Point to a Very Strong FY24

Morningstar DBRS released a commentary discussing the Q2 2024 results of seven Spanish banks (Santander, BBVA, Caixabank, Banco de Sabadell, Bankinter, Abanca, and Kutxabank).

Summary highlights from the commentary include:
-- Spanish banks reported another extraordinary quarter in Q2 2024, supporting our expectations that FY24 profitability will remain better than in FY23.
-- Spanish banks exhibit robust capitalisation and sound asset quality despite the high interest rate environment.
-- The sustained strong results reported by Spanish banks in recent quarters underpin our positive view on their credit profiles.

"Building on H1 2024 results, we consider that FY24 profitability could be even better than in FY23 on the back of credit growth, resilient net interest margin, and lower regulatory levies", notes Maria Parra, Vice President, Global Financial Institutions Group at Morningstar DBRS. "We also maintain our expectation that asset quality in FY24 should remain stable or slightly improve, supported by the solid economic performance of the domestic economy and the likelihood of additional interest rate cuts in H2 2024".