La deuda soberana hace sufrir a la banca en Bolsa: ¿Irá la corrección a más?

Spanish banks are struggling to avoid a third consecutive week of losses in the stock market, marking the worst slump since March. The Ibex 35 Banks index has lost 8% of its value since reaching historical intraday highs of 2,241 points on September 3. Investors are selling off shares due to two main concerns: the banking sector's decade-long rise of nearly 450% and the ongoing concerns about potential sovereign debt crises.

While alarms have not yet sounded, the market is watching closely as France faces deteriorating public accounts and a 10-year bond yield nearing 4.9%. Bankinter advises a cautious, tactical approach to European banking amid the risk of higher bond yields and perceived risk in French banking. Analyst Rafael Alonso from Bankinter maintains a neutral stance, reducing recommendations to a neutral recommendation.

However, most experts see no immediate justification for a significant downturn in the Spanish stock market. Despite significantly reducing exposure to sovereign debt since the 2012-2013 European debt crisis, Spanish banks have made a large-scale purchase of sovereign debt over the past four years, ranking third in terms of exposure among major European economies.

Only Portuguese and Italian banks have a higher percentage of sovereign debt to quality capital (CET1) capital. The four major Spanish groups - Santander, BBVA, CaixaBank, and Sabadell - hold a combined 167.8 billion euros in Spanish sovereign debt, and 260 billion euros in total exposure to Europe. Santander leads with 75.9 billion euros in Spanish sovereign debt, plus 20 billion euros in other countries and 8.25 billion euros in Openbank Europa.

CaixaBank maintains an even distribution: 38.8 billion euros in Spain and 33.3 billion euros in other EU countries. BBVA and Sabadell are heavily invested in Italian bonds. The main concern now is the potential for contagion and whether Spanish banks, which have enjoyed a 17.3% profit this year and aim for consecutive sixth year of gains, will continue to suffer in the market.

Most firms view the situation as a mixed bag, with JP Morgan and Barclays defending European banking, arguing that the correction presents a buying opportunity and the sector's strong profitability makes it attractive. Analysts like Jos� Ram�n Iturriaga from Abante and Borja de Castro from BiG Banco maintain a positive outlook, pointing to cheap financing and attractive yields from the sector's debt portfolios.

While acknowledging the relevance of European banking exposure, they believe the impact of sovereign debt will be manageable given the high proportion of lower-cost debt, improved earnings generation, and stronger balance sheets.