The purchase of a banking coconut is already a more profitable point than its dividend

Logic said, for several months, that the cycle of Cow From the banking sector, he was about to reach his end. But nothing is further from reality. Although the European Central Bank has reduced interest rates, the evolution of the old continent bank reflects that there was still a lot of potential to deploy between these values.

So far this year, the European banking sector 25% is reassessedAnd it went through a delicate moment with the correction after Release day Trump, early April, who came to erase up to 15% sector value in just a few days. After that, the pricing truce and prospects for prices will be negotiated, have supported a solid rebound between these stock market companies which return to place them among the most intimidatives of the year on the continent.

The sector took advantage of these high -type years to better adapt to an environment less conducive to its main activities, such as that to come, in which they have focused on the increase in other sources of income such as commissions and the benefit of the reduction in cost of remuneration for responsibility. The test was first the American bank, whose results improved forecasts and then the National.

Bank He was the first entity to present his results of the first quarter of the year, in which he underwent a 6.4% drop in the margin of interest and, however, has obtained record advantages When you pay payment of the bank tax in the second and fourth quarter, and by increasing volumes and income from the credit portfolio.

Faced with the interests of the investor, in this context of uncertainty and volatility, while commercial treatment with the United States is clarified, the banking sector is distinguished by its small exposure to this geography, because most income is given in the national field, with the exception of certain specific cases such as BBVA or Santander. Likewise, the possibility that the monetary agency must stop the drops of the types before a possible inflation rebound caused by the prices imposed by the European Union in the United States as a response would be a new value catalyst.

In this sense, high dividend companies such as banks are an additional defense for the risk profile of portfolios, as shown in this crisis and other crises on the market, because companies with the highest payments tend to do better during these periods. If it is true that after the strong recent increases in the stock market, the profitability of the dividend in the sector felt and fell to 6%, according to the estimates of the consensus of the analysts that he collects Bloomberg

However, there is another way to invest in banks to avoid fluctuating the price of equity and to do so thanks to their obligations. More specifically through their Coconut (convertible contingent bonds), which now They offer a profitability of 7%,, A point above the dividend. The performance of this type of asset has decreased in the past year, as money has entered for fixed income securities due to standardization of types. However, it should be remembered that about two years ago, they underwent a historic collapse with the bankruptcy of the Swiss credit (it was absorbed by UBS) and the decision of the Swiss regulator to leave the holders of these obligations without the possibility of recovering their loans. The return required then It went in a few days from 8% to more than 15%.

Luca Evangelisti, ministry responsible for Jupiter AM, explains that “the announcement of the prices has had a considerable impact on the evaluation of banks, but so far, this impact has been much lower in the evaluation of the debt of the sector”. “The truth is that the banks are not at the center of the weakness induced by the prices and the impact on them can be of the second or the third order,” he adds. “In Europe, German banks are potentially the most exposed for their exposure to car companies, chemicals or technological products, but we do not expect a very large impact because capital levels are very solid and can absorb any possible deterioration in the quality of assets,” he concludes.

“THE AT1 They have been the class of credit assets which has behaved better in recent months and, despite the limited potential to shrink the gap, the recent expansion of differentials can already present certain opportunities taking into account the CD market (Default credit swaps) has remained calm these days, “they conclude.