MAPFRE AM is more optimistic about banking sector

The banking sector is experiencing a very positive year after suffering the effects of the pandemic in 2020. With considerably high growth expectations, Cristina Benito, head of equities at MAPFRE AM, points out that this bullish view on banks is primarily due to the improved economic outlook, as well as the estimated earnings for banks.

She noted that, after the publication of 2020 results, "the earnings momentum of the banking sector improved substantially", and for this year "the analysts' consensus is for significant reductions in the cost of risk".

Cristina also points to the resumption of dividends as another key factor in the optimistic outlook for the sector. According to an article in Bloomberg, the expert recognizes that the collection of such dividends is being limited by the restrictions imposed by the ECB, although she expects them to be lifted in September: "After the removal of the restrictions, it’s expected that banks will return to their shareholder remuneration policies, offering dividend yields that are estimated at around 5-6 percent," she adds.

Last but not least, she added that in addition to the good stock market performance so far this year (the STOXX 600 Banks has risen by 28 percent), "the sector continues to offer attractive valuations" for investors.