MUMBAI (Thomson Financial) - Fitch Ratings said 2008 will prove to be a
challenging year for Spanish banks, but added major Spanish banks are
well-placed to face the complex operating environment, due to their strong
retail focus and franchises, proactive management approach, good recurring
earnings capacity from the retail business, good cost-efficiency and risk
management system, and a sound regulatory framework.
The 2007 results of major Spanish banks were strong and not affected by the
spill-over effects of the US sub-prime crisis, given their minimal or no
exposure to complex structured products, Fitch said.
However, 2008 will prove challenging for banks, as growth in the Spanish
economy slows to a forecasted 2.5 pct, driven by a slowing housing market, and
liquidity is expected to remain tight in the international markets, Fitch added.
While there has been increased access to wholesale markets for funding,
Fitch said it has no major concerns over the liquidity levels of the major
Spanish banks.
Fitch said Banco Santander and Banco Bilbao Vizcaya Argentaria should
continue to report strong profitability in 2008, benefiting from their business
and geographic diversification, and strong retail banking franchises in core
markets.
While growth in lending in Spain will slow down, Latin American economies
are expected to continue to perform well. Though more exposed to the Spanish
economy, Caja de Ahorros y Pensiones de Barcelona, Caja de Ahorros y Monte de
Piedad de Madrid and Banco Popular Espanol have strong national retail
franchises, the ratings agency said.
TFN.newsdesk@thomson.com
ami/ami/ans
COPYRIGHT
Copyright Thomson Financial News Limited 2008. All rights reserved.
The copying, republication or redistribution of Thomson Financial News Content,
including by framing or similar means, is expressly prohibited without the prior
written consent of Thomson Financial News.
|