Banco Popular has released its results for the 4th quarter and consolidated 2009. In general, the results were slightly above consensus estimates of analysts at the level of net profit (+11%). Maintains a significant growth in net interest income, which can maintain a double-digit growth in the year in which the accumulated slowdown 4T09.

The bank president said during the presentation of the results that the slowness of the Bank of peak “in the second or third quarter” of 2010. But until then, will be “increasing” and “close” to the maximum. In this regard, he noted that the recoveries of bad debts “were over,” adding that the bank has 600 people! working in the fight against default. Banco Popular in front of the financial year 2010 with great care and can not believe that there will be “no surprises”.

If so, it is clear that the results of the first half of 2010 will not be encouraging that the unemployment rate in Spain will increase and that our differential with Europe will be extended (and worse).

Highlights of lines:

• The net interest margin (+11%): Throughout the quarter, continues to show strength because of differences in management capacity: 5% vs. 4Q08 vs. Flat. 3T09. By 2010, it is logical to see weakness in this figure, with negative growth rates.

• EBITDA (11%). Remarks by the parties most relevant: i) Commissions, under estimation and continue to show weakness with a quarterly decline of 3%, ii) the ROF is supported in the preferred program conducted by subordinates in 4T09 (gains of € 112mn), the results Trading is distorted and compensate the behavior of the committees.

• operating profit (+18%). Drop 1% of overheads and efficiency of 29.3% (below comparable). After the purchase of minority shareholders of subsidiaries, confirms the cost-control, which has been a constant throughout the year and was eventually placed in a contraction of -2.2%.

• The costs of administration, Evolution Flat 6% decrease in office and the cost of renting has increased by 25%. Must be the only ones to pay more rent for Inditex, Banesto and the chain Vips are revising downward rents drastically.

• Personnel costs (-3%), with a 4% decline in the number of employees!.

• Asset quality: uncertain balance amounted to 5.512m (vs 273m increase per quarter. Delinquency 4.8% and the coverage of 50%. Details of these very weak

• Value of capital: it maintains the leading position in the Core Capital (8.6%). Solid
In terms of valuation, the deal is quoted at 0.9 x P / BV 2010. The PER’10 negative 15x to 9x against Santander and BBVA. Foreign analysts, as Citi has set a target price to 5.5 € currently trading above € 6 (with the falls are now almost comes close to 5.5 €). They must really fear the Spanish economy.