Financial adviser Kepler Cheuvreux says in a new report that Spanish banks Bankia, Liberbank and Caixabank are among those set to benefit most should interest rates start to rise.
The report, which looked through the figures of 28 European banks, estimated Caixabank would be the eurozone institution experiencing the best increase in pre-tax profits, should this come to pass, given the hypothetical scenario of rates returning to an upwards path.
Caixabank pre-tax profits could rise by 50% in five years if interest rates departed from unprecedented low levels.
Spanish financial group Liberbank would see its pre-tax profits jump by 46%.
Bankia could see pre-tax profits up 38% in five years, while Italian banking group UBI Banca would see a similar 38% gain, followed closely by German institution Commerzbank with a 37% potential growth in pre-tax profits.
In contrast, Kepler’s report also pointed to those banks that which experience the worst decrease in pre-tax profits in an environment of upward rates. For example, Banco Popular pre-tax profits would fall by an estimated 3% in five years.