Legal sources have confirmed that the magistrate of the National Court has agreed to the imputation of the bank at the request of the Anti-Corruption Prosecutor's Office within the piece of the Tandem case relating to the bank contracts to Villarejo, which began in 2004 before a hostile takeover by Sacyr and lasted until 2017. In effect, the judge has asked BBVA to appoint a person as a representative before the court but has rejected the entity's request to appear as injured party in the cause.
In this sense, it must be clarified that the prosecution requested the bank's imputation last week after analyzing the seized documentation in the records carried out in November 2017 and that provided by BBVA. Where several current and past charges of the bank are investigated in this case, which is secret, including the former CEO Ángel Cano and the former head of security Julio Corrochano, who posted a bail of 300.000 euros not to enter prison.
Now one of the hot spots in this value of the selective index of equities in Spain, the Ibex 35, is how their shares will respond on the stock market. Not surprisingly, the fear among small and medium investors is that their securities may fall again in the coming weeks. It is an already very negative scenario after starting a strong downtrend from 9 euros per share. And that has led it to currently trading very close to levels of 5 euros, which means that it has depreciated by more than 60%. Being one of the worst values of national equities in the last twelve months.
BBVA: you can fetch the 4 euros
In a very negative environment in the price of its shares, the fact that BBVA's leadership has been accused of corruption, may have some very worrying effects for the interests of investors who have already taken positions in this important value of the Ibex 35. Beyond other considerations of a technical nature and perhaps also from the point of view of its fundamentals. In this general context, of course, it cannot be ruled out that it will visit lower levels than those it currently presents. Even approaching 4 euros a share and equipping yourself with the Banco de Santander.
While on the other hand, another aspect of concern for small and medium investors lies in the fact that their actions can take an even more dangerous path because it is immersed in a highly reliable selling stream. Where it is not ruled out that it can go lower in its price and even knock down new and important supports. To the point that it is one of the banks with the worst technical aspect in the last three months. All its parameters have deteriorated with great force and make doubts about what the value can do in the coming days.
With punctual rebounds
Its current technical aspect does not take away the opportunity that significant and intense bounces can occur during the configuration of its prices. But they will serve, more than to take positions in value, to undo them in the face of what may happen. Because it cannot be forgotten either that the appearance of the main European indices are not the most desirable. Where the Ibex 35 is fighting for stay above 9.000 points and knocking it down could take it to even lower heights. Something that would also affect BBVA shares and more so in the general context in which the financial institution finds itself at the moment.
Despite the fact that a good part of the small and medium investors can interpret that their prices are at the moment very cheap. It is special, when just a few months ago it was trading around 8 euros per share. That is, it depreciated by half and that does not indicate many positive things in value. If not, on the contrary, it indicates a manifest weakness that does not give good vibrations to enter their positions from now on. Not surprisingly, there is more to lose than to gain and this factor should make us more cautious to operate with the listed company.
A very punished sector
In either case, the banking sector is being one of the hardest hit in the equity markets. The question is whether it will maintain this trend from the next few weeks. Because in addition, there is no doubt that it would be one of the most punished in the event of a strong Brexit developing this fall. Where new and intense decreases in its price could be seen that could lead BBVA to match in the conformation of its prices with the Banco Santander which is currently at the psychological barrier of 4 euros.
While on the contrary, there is little prospect that this market value will return to the levels of previous years. At least with regard to the short and medium term, which is the term of permanence of many small and medium investors. With a dividend yield which is currently 4,5%. Of course it is not one of the highest of the Ibex 35 but it supposes a fixed and guaranteed charge every year. In some harmony with that of other financial groups. Although the question that remains among financial analysts is whether it will be able to maintain this profitability from these precise moments.
Strategies to carry out with the value
Now we only have to think about what we can do with this important value of Spanish equities. Although the investment strategy is to sell your shares, the most aggressive retailers can try to develop a trading operation to make their savings profitable in a very short space of time. With the main objective of take advantage of its volatility to earn a few euros in this kind of fast operations. Another very different thing is that it can promote a change in trend since for this it would have to go to levels around 6 euros.
On the other hand, it is one of the securities with the highest risk in operations. Derived from its own corporate situations and from the sector it integrates. To which should be added that expectations for equity markets are not the best, at least for the next two or three years. From the stage, the best advice is stay still in opening positions and if it is possible to place other values on the radar. It is not wise to make purchases in the current climate of the financial markets. Since you can take more negative surprises with this banking group from now on.
If you want to be in the banking sector, you have better options, such as Banco Santander. Where the current events can harm them more in their positions in the financial markets and it will be necessary to be very attentive to what can happen from the legal point of view. 'Cause you can definitely take a hard hit that in the end ends up affecting investors. Faced with this scenario, the most practical thing is not to be in value under any circumstances. Not surprisingly, this action can pay dearly from the next few days, as pointed out by some market analysts.
Earn 10% less on your results
Between January and March 2019, the BBVA Group earned 1.164 million euros, 9,8% less than in the same period of the previous year and 16,2% more than in the previous quarter, at current exchange rates. Excluding from the comparison the results of BBVA Chile for the first quarter of 2018 (divestment carried out in July 2018), the result was 7,7% lower (-6,0% in constant euros). While on the other hand, the NPL ratio remains at 3,9% and the coverage rate improves to 74%. The cost of risk, for its part, stands at 1,06%.
Among its latest quarterly results, the fact that BBVA continues to be the leader in terms of profitability also stands out, with an ROE of 9,9% and a ROTE of 11,9%, significantly above the average of European competitors. At the same time, the CET 1 'fully-loaded' capital ratio closes the quarter at 11,35%, approaching the objective of being between 11,5% and 12%, and absorbing all the impact of IFRS 16. In this way, it is evident that the gross margin was 3,3% above the same period of the previous year, an advance that in constant terms was 7,0%, reaching 6.069 million euros. In line with those expected by the equity markets.
From the stage, the best advice is stay still in opening positions and if it is possible to place other values on the radar. It is not wise to make purchases in the current climate of the financial markets. Since you can take more negative surprises with this banking group from now on.