Bancos: cómo subirse al tirón en Bolsa

The Spanish banking sector is experiencing a surge in the stock market, despite reaching valuation peaks. Industry experts advise greater selectivity following six consecutive years of price increases. Spanish banking has become a rocket in the stock market, with the Ibex 35 Banking sub-index up 27.3% through the first quarter of 2026, marking the latest peak in a historic 494% cumulative appreciation since December 31, 2020.

This unprecedented upward spiral has generated gains ranging from 282% at Bankinter to the 954% ceiling of Banco Sabadell. The question now is whether there is still room for more record-breaking performances or if a correction or prolonged consolidation phase is imminent. Experts agree that current advances are unlikely to be repeated, but they also agree that positive winds continue to blow in the sector's favor.

The rising interest rate environment, both within and outside the Eurozone, is the banking sector's best ally, but with very demanding valuations, experts recommend being more selective than ever. Spanish banks Santander, BBVA, CaixaBank, Sabadell, Bankinter, and Unicaja have all reported strong profits ranging from 10% to 31% so far this year and are trading at historic high valuations.

The rally has pushed the price/book ratio to a band of 1.39 to 2.41 times, requiring close monitoring of whether expectations of further interest rate hikes are already reflected in the current prices. Analysts predict aggressive growth, with markets discounting nearly three additional interest rate hikes beyond the two already implemented by the ECB this year.

However, beyond the impact of rising money prices, the market believes the banking sector will continue to benefit from the tailwind in the new monetary field. Lombard Odier believes Spanish banks' stellar performance in the sub-index should continue, citing a growth scenario with official interest rates and deregulation. According to this scenario, profits are expected to accelerate.

Valuations relative to the market in general remain favorable, with attractive dividends and share buyback programs. For interest rates specifically, analysts warn that the impact of further hikes toward 3% will not be immediately noticeable in the sector's key figures. Sensitivity is relatively limited in the first year but increases in the second as loans and other assets on the balance sheet are renewed at higher rates, according to Citi analysts.

The Swiss firm identifies CaixaBank and Bankinter as the most positively exposed to an interest rate hike. According to their calculations, a 100 basis point increase would have a positive impact of around 7-7.5% on net interest income for both entities, compared to around 6% for Banco Sabadell and Unicaja. The evolution of inflation and the health of major global economies will ultimately determine how much more benefit the banking sector can derive from further interest rate hikes.

However, the sector has proven it can generate strong profits even in adverse monetary scenarios. As BlackRock analysts note, European banks have demonstrated the ability to generate solid profits even when interest rates have fallen from their 2024 peaks. The first half of Spanish banks' 2026 results exceeded expectations, with a record joint profit of 20.164 million euros between January and June, 18% higher than the previous year.

Total revenues increased by 9% to 65.470 million euros, driven by robust performance in both net commissions and interest margins. The lending business is also strong, with the highest level of loans to companies in July since records began, followed by consumption loans exceeding 4,000 million for the first time. This strength convinces the market almost completely that Spanish banking can maintain its aggressive plans for shareholder compensation in the long term.

Generous payouts have become the additional safety net for investors, who view the combination of rising earnings from higher rates, large dividends, and share buybacks as the best option at the moment. With limited organic growth (Santander being the exception), Spanish banks have increased shareholder payouts as a tool to boost their attractiveness in the market and avoid accumulation of inefficient or unproductive capital.

UBS believes Unicaja will be the most generous in the upcoming three years (2026-2028), distributing 99% of net capital generation to shareholders this year and the following.