Spain's Bank restructuring 'slow'

Goldman Sachs today reported how the restructuring of Spain's savings banks, remains slow, despite the takeover of CajaSur by the Bank of Spain over the weekend. It mentioned how few lessons had been learned between this seizure and that of Caja Castilla La Mancha in November of last year. Goldman’s mentioned how individually, the problems of the cajas is relatively small, with CajaSur accounting for less than 1% of the banking sector in Spain.

But it needs to be noted that overall these ‘Caja’s’ account for 40% of the Spain banking sector's total assets, and 48% of total loans. It cited an extreme situation in which cajas would loan have defaults of 50% resulting in a pretax drain of 23 billion to 70 billion euros. Overall, it's cautious on Spanish banks, based on further credit quality deterioration, reveue pressure and a poor macro outlook. It rates Popular, Sabadell, Bankinter sell, and Banesto neutral. BBVA is rated nuetral and Santander a buy, it said, citing that they are healthy with wide gross operating margins, international businesses and high capital buffers.