BBVA Posting Better Results And Making Better Decisions

Spanish banks have done alright over the past year, with BBVA (BBVA), Santander (SAN), and Caixa (OTCPK:CAIXY) all up between 20% and 30%, in line with other well-liked European banks like ING (ING), and well ahead of some of their other large European peers. Even with the turbulence in Catalonia, economic conditions have been improving in Spain, and with that so has credit quality. What’s more, both BBVA and Santander have gotten a little more proactive about selling underperforming assets.

While BBVA has done fine over the past year, there could still be a little upside left in the shares. Even though I don’t think BBVA will get to the psychologically important 10% ROE level for a few years, I do expect double-digit earnings growth over the next five years and high single-digit growth over the long term, supporting a fair value around $9/ADR.

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BBVA Posting Better Results And Making Better Decisions