El temor a la deuda presiona al alza el coste de capital de la banca

The increasing fear of debt is pushing up the cost of capital for European banking. According to recent data from FactSet, the cost of capital for European banks rose from 11% to 12% in the last month. Santander's cost of capital stands at 12.4%, while BBVA is at 11.6%. The rise in the French government bond yield, which surpassed the psychological barrier of 5% last week, has raised concerns among markets about a potential risk of contagion to the debt of other European countries.

Experts currently dismiss the possibility of the situation worsening, but investors are perceiving more risk and raising the hurdle for investing in certain assets, such as bank securities. The tension in the markets has caused the cost of banking capital to surge from 11% to 12% in the past month, according to data from FactSet.

The cost of capital, which measures the minimum return that investors require to invest in a stock, is a difficult metric to calculate accurately as analysts can use different formulas for its computation. Historically, the cost of capital for European banking has fluctuated between a low of 8% during economic booms and peaks near 18% during financial crises.

The 12% mark reached in October is not the highest seen in the past year. In March, the cost of capital climbed to 13.5% during a period of market nervousness due to geopolitical tensions in the Middle East that caused a sharp rise in Brent oil prices, which first exceeded $100 per barrel since 2022. After some volatility in the spring, the cost of capital began to decline progressively from the end of May, reaching 11% in September.

Thus, the rise in October, while moderate, represents a turning point reflecting growing uncertainty and a heightened perception of risk, amplified by the French debt crisis, as agreed by several analysts.