* Macquarie says new reforms could drive short-term relief
* Says concerns remain on credit exposure of sectors outside real estate
May 11 (Reuters) - Credit Suisse and Macquarie Equities Research cut their targets on Spanish banks ahead of government measures aimed at reforming the sector.
At its weekly cabinet meeting the Spanish government is expected to announce new requirements for the banks to set aside a further 35 billion euros ($45 billion) to cover loans in their real estate portfolios.
Macquarie said that though an announcement could drive some short-term relief, it does not see it altering the negative fundamentals.
Spain’s banks were hit by billions of euros of losses after the bursting of a decade-long property bubble in 2008 and concerns about them have added to fears of a new euro zone debt crisis.
“A comprehensive bad-bank plan may be positive for the sector in the longer-term, but shareholders would face upfront dilution and question marks would remain on the sovereign position,” the brokerage said in a note to clients.
However, it expects the actual outcome to be a less comprehensive one involving requirements for further provisioning. “Questions will remain over institutions’ ability to raise the required provisions,” it said.
While Spanish policy makers focus on construction and developer exposure, concerns remain on the other 81 percent of total credit exposure that is not within the commercial real estate definition, it added.
Macquarie sees Popular being most negatively impacted by the speculated new rules.
It considers BBVA and Santander to be look better placed but prefers BBVA for a stronger capital position.
Credit Suisse too cut its price targets on Popular and Banco Sabadell on their heavy exposure to increased real estate provisioning requirements and higher non-property impairments.