Spain’s Bankinter Bucks Trend With Big Gains: Three Charts

Bankinter SA is handing investors some of the biggest gains among firms in Spain’s IBEX 35 Index, even as larger rivals have tumbled. The second-smallest lender in the benchmark by market capitalization has climbed 6.5 percent this year, while the gauge has declined 9.7 percent.

During Spain’s real estate boom, Bankinter was less active than peers in lending for developments and home loans. As a result, it has a healthier balance sheet than competitors, who remain encumbered by provisions for bad loans years after the bubble burst.

Bankinter, which is focusing on consumer finance and private banking, has managed to increase net interest income as other Spanish lenders struggle with low interest rates and weak credit volume. Net interest income, the difference between what a bank charges for loans and pays for deposits, is the main source of revenue for the country’s banks.

While Bankinter boasts higher profitability and healthier assets, the recent rally has made it relatively expensive. The stock is trading at 14 times expected earnings, compared with 9.5 times for Banco Sabadell SA and 11 times for CaixaBank SA.

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