Markets Showing Strong Optimism For Spanish Banks

Spanish banks are up between 34 – 63% since the summer, outperforming the rest of the periphery, and the market seems to pricing in a lot of optimism even though Spanish banks still have weak loan growth and a high level of non-performing loans. But this optimism comes from making some fairly strong assumptions about next year’s performance, says Citi analyst Stefan Nedialkov. Spanish banks performance “Spanish banks are up 34-63%, outperforming the ESTX BANKS PR.EUR (INDEXSTOXX:SX7E) by 5-35%. What strikes us is that this stellar price performance seems to have been driven almost exclusively by multiples rerating rather than consensus…