On Tuesday, Deutsche Bank (ETR:DBKGn) adjusted its price target on shares of CaixaBank SA (CABK:SM) (OTC: OTC:CAIXY), increasing it to €5.70 from the previous €5.45, while retaining a Hold rating on the stock. The adjustment comes after the bank's review of CaixaBank's third-quarter performance in 2024, which showed consistent positive trends, albeit without any major surprises.
The bank's analyst noted that CaixaBank's Net Interest Income (NII) remained resilient during the third quarter of 2024. However, a point of concern was the compression of the customer spread, which was more significant than that experienced by most of CaixaBank's peers. This compression was somewhat balanced by an increase in excess liquidity contribution. The analyst pointed out that this could signal potential challenges to profitability if lower-than-expected interest rates persist.
Despite these concerns, the impact on Deutsche Bank's forecasts for CaixaBank was described as limited. The bank's revised models, which now include the new interest rate curves, suggest that any negative effects are mitigated. This is further supported by emerging signs of improved lending activity within CaixaBank.
The bank's commentary indicates a cautiously optimistic view of CaixaBank's ability to navigate the current financial landscape. While acknowledging potential risks associated with interest rates and customer spread compression, the bank also recognizes the positive aspects of CaixaBank's recent performance and its prospects for maintaining solid trends in its operations.
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