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- Financial markets are not efficient. We have seen evidence of this over and over again.
- Santander has exhibited steady profit improvements.
- Since July, without any significant fact arising to public knowledge, the bank started to diverge from the best performers in the banking industry.
- After comparing Santander's stock price performance with the general market, I think we might be looking at an entry point for the prospective investor.
- Banco Santander reports highest net income in 2.5 years' time and a sharply increasing CET1 ratio.
- The earnings don’t surprise me, but the CET1 ratio does, as it’s now more than 100bp higher than at the time the stress test was conducted.
- The bank’s improving capital position make it an interesting fully-capitalized European bank with exposure to emerging markets.
Banco Santander: 30% Potential Upside With A 7% Dividend While You Wait
- Banco Santander has experienced difficulty recently in Spain and Latin America but conditions in those regions have begun rebounding and Santander is positioned to benefit.
- Forecasts of 28% earnings growth and 6% revenue growth in 2015 coupled with a recovery in the Eurozone could fuel a sustained rise in the stock price.
- Banco Santander's 7% scrip dividend is an additional incentive for shareholders as the growth trajectory unfolds.
- Banco Santander sold off despite a solid earnings report.
- Santander is showing impressive performance in its units around the world and the Spanish economy is recovering.
- Santander is oversold and pays a nice dividend while you wait for the price to recover.
- We're focusing on the strengths and weaknesses of Citigroup in this article.
- Specifically, we're looking at its profitability, growth prospects and its potential to become an attractive income stock.
- We also focus on its valuation and find that it appears to offer good value when compared to a sub-industry peer.
The Major Catalyst For Santander That Nobody Is Talking About
- Santander has 1/5 of its total profit coming from Brazil, tied for the most from any nation.
- The Brazilian economy has been showing sluggish growth recently.
- The upcoming presidential election in Brazil provides an interesting opportunity for the economy to be put back on track.
- Santander is seen as another Southern European bank.
- However, the bank was able to maintain healthy levels of capital and liquidity.
- In the current scenario, banks with liquidity have access to good assets at attractive prices.
- Santander Bank has a good track record of making good deals when the opportunities arrive.
Banco Santander, S.A. Tops International Bank Credit Default Swap Trading 2010 To 2014
- The Depository Trust & Clearing Corporation has reported on 177,974 weeks of trading on 1,206 reference names, of which 111 were international banks, from 2010 to 2014.
- We analyze 14,737 weeks of trading for these banks and find that the most actively traded name, Banco Santander, S.A., averaged only 5.11 non-dealer trades per day.
- We caution against the use of credit default swap data for analysis or risk management without confirming trading volumes, if any, associated with the data.
Santander Looks Pricey Relative To Its Capital And Growth Prospects
- Santander has participated in the Spanish bank rally, but the Spanish NPLs are still high and the company's operations in Mexico and Brazil haven't been outperforming.
- Santander's capital looks a little thin, but management seems unwilling to go to the market to shore it up.
- Based on a long-term ROE estimate of 12.5%, these shares look overpriced and likewise seem to be factoring in a near-term RoTE of over 16%.
- Santander has been an attractive investment in the financial sector but has carried a high level of risk due to weakness in European economies which has scared investors.
- Management set forth a three phase plan to enhance profitability which has begun successfully.
- Santander is seeing improvement in many key metrics, making it a less risky investment than it was a year ago.
Where Banco Santander Is Experiencing Growth And Where It Is Lagging
- Growth is strong for the company in certain geographic regions.
- Other regions are experiencing a lag in business.
- The valuation remains attractive as investors are still catching on to the opportunity.
- The stock remains a buy especially with a 6.5% yield as icing on the cake.
- Consolidations after recent acquisitions are leading to decreased expenses.
- Revenue is sustainably growing through net interest income and net fee income.
- The recovering economic climate provides a tailwind for Banco Santander.
Banco Santander: Key Shifts Will Lead To Incredible Profitability
- A focus on client deposits as opposed to institutional deposits will raise net interest margins.
- Key acquisitions will allow for substantial revenue growth and diversification.
- Decreasing provisions for loan losses will add to profitability.
- Consolidations from overlaps after acquisitions will begin to reduce operating expenses.
Yesterday, 1:27 PM
- Monitise (OTCPK:MONIF) gets a £49.2M investment from strategic partners Telefonica (NYSE:TEF), Santander (NYSE:SAN) and Mastercard (NYSE:MA).
- They will buy 161M ordinary shares at 30.5p/share (Nov. 26's close), representing 8.2% of the existing issued ordinary share capital.
- Monitise also says it's in discussions to expand its commercial relationships with above partners "to support the development and accelerated rollout of its global platform capabilities."
- IBM has agreed to deploy Watson in support of Monitise’s new technology platform.
- Monitise also reiterates current year and longer-term guidance.
- Short interest is ~11% of float.
- Monitise was best performer on FTSE AIM 100 index today.
- Source: press release
Wed, Nov. 26, 7:45 AM
- The bank is looking to transfer its 26.8% stake in Tonopah Solar Energy, LLC to a new holding company, with two Canadian public pension funds each holding about a one-third interest in the JV, reports the WSJ. Financial terms weren't disclosed and Santander (NYSE:SAN) is currently seeking regulatory approval for the move.
- In other news, the bank yesterday agreed to buy a $300M consumer loan portfolio from the Mexican unit of Scotiabank, and Santander says about 90% of the more than 47K clients in the portfolio represent new business opportunities.
Tue, Nov. 25, 5:37 AM
- Banco Santander (NYSE:SAN) has named former CFO Jose Antonio Alvarez as chief executive officer to replace Javier Marin, who had held the position for less than two years.
- His appointment is the first big management shake-up at the euro zone's biggest bank since Ana Botin became chairman after her father's death in September.
- The bank also named Jose Garcia Cantera as new CFO and appointed three new independent members to its board.
- SAN +1.6% premarket
Thu, Nov. 6, 9:13 AM
- GE (NYSE:GE) Capital has closed the sale of its GE Money Bank consumer finance business to Santander (NYSE:SAN).
- "This sale is part of our overall strategy to focus GE Capital on our commercial portfolio with a goal of becoming 25% of GE’s overall earnings," says GE Capital CEO Keith Sherin.
- Previously: Santander to acquire GE Money Bank
Mon, Nov. 3, 11:34 AM
- It's a second day of sharp losses for Banco Santander Brasil (BSBR -7.8%) after Banco Santander (SAN -1%) on Friday announced plenty of willing takers for its exchange offer for shares in BSBR it didn't already own. About 13.65 of BSBR's share capital tendered, boosting Santander's stake in its Brazilian unit to 88.3%.
- To pay for the deal, Santander will issue 371M shares, or roughly 3.09% of its share capital.
- Also not helping BSBR today is a 2.3% decline in Bovespa.
Mon, Oct. 27, 12:52 PM
- “Judging from the market reaction today, investors don’t completely believe in the ECB," says Peter Garnry, head of equity strategy at Saxo Bank. "They are more pessimistic on the banks."
- Financial firms were among the worst performers today following the release of ECB stress tests over the weekend, falling 0.9% vs. the Stoxx Europe 600's decline of 0.6%. Hardest hit were the Italian lenders after that country's banks made up a disproportionate share of those who failed the exams. Not failing, but nevertheless hit: Unicredit (OTCPK:UNCFF, OTC:UNCFY) -2.6%, Intesa Sanpaolo (OTCPK:IITOF, OTCPK:IITSF, OTCPK:ISNPY) -3.1%. Italy's FTSE MIB index (NYSEARCA:EWI) led European declines, falling 2.3%.
- Also taking a hit despite no issues from the stress tests were Europe's larger banking powers: Santander (SAN -3%), Deutsche Bank (DB -1.6%), ING (ING -1.8%), BBVA (BBVA -2.3%).
- EUFN -1.4%
- Previously: ECB stress test failures centered among Italian banks
Fri, Oct. 24, 2:44 AM
- Thirty-one banks are set to participate in the Fed's 2015 stress tests, which will see how they can withstand pressures such as a spike in oil prices, a rise in the U.S. unemployment rate or an increase in risky corporate loans. The capital plans are due in January.
- Among the bank's that failed last year's tests are Citigroup (NYSE:C), and the U.S. units of HSBC (NYSE:HSBC), Santander (NYSE:SAN) and RBS (NYSE:RBS).
- Deutsche Bank (NYSE:DB) will participate for the first time, and has already felt pressure from the NY Fed, which has told it in a private letter that its regulatory reports were "low quality, inaccurate and unreliable".
- This Sunday, the ECB will release results for stress tests of 130 eurozone banks amid a deteriorating economic outlook for the region.
Wed, Oct. 8, 2:18 AM
- Eighteen of the world's largest banks, ranging from Credit Suisse (NYSE:CS) to Goldman Sachs (NYSE:GS), have agreed to give up the right to "close out" deals on derivatives contracts if a financial institution runs into trouble, FT reports.
- The International Swaps and Derivatives Association is due to announce the agreement to change its “protocols”, which govern the $700T market, in the next few days. They will take effect from January 1, 2015.
- Related stocks: HSBC, JPM, OTC:BNPZY, DB, BCS, BAC, SAN, C, RBS,
Fri, Sep. 26, 3:33 PM
- The New York Fed pushes back against allegations that it was too soft on big banks -- particularly Goldman Sachs (NYSE:GS) in a transaction involving Banco Santander (NYSE:SAN), a deal that got new interest when secret recordings by former examiner Carmen Segarra came to light today.
- Segarra filed suit against NY Fed claiming she was fired for criticizing Goldman Sachs just seven months after being assigned to investigate GS practices. Her case was thrown out this year.
- The examiner had made 46 hours of recordings, though, and ProPublica reports they show a Fed that was loath to push hard against Goldman, especially a regulatory capital deal where Santander was to transfer some shares in a Brazilian subsidiary to Goldman to cut capital requirements.
- A former Fed official is on the recordings saying that deal was not illegal, but "shady."
- WSJ: NY Fed staff afraid to speak up, secret review found
Thu, Sep. 18, 11:17 AM
- At issue was a $0.15 per share dividend paid in May by Santander Consumer USA (SC +0.1%) despite the fact that the capital plan submitted by Santander Holdings - the U.S. unit of Santander (SAN +1.2%) - had not been approved by the Fed.
- Santander quickly mitigated the violation by injecting $20.8M into its U.S. operation, and today agrees to strengthen its board oversight of management regarding any capital returns.
Tue, Sep. 16, 7:13 AM
Mon, Sep. 15, 7:50 AM
- “The group has the capital base, balance-sheet strength and capacity for revenue generation necessary” for growth, says new Santander (NYSE:SAN) chief Ana Botin, who took over for her father last week after he passed away. Speaking at a shareholder meeting where owners approved the stock issuance necessary to fund a bid for up to 25% of the bank's Brazilian operation which it doesn't already own, Botin pledged to pursue her father's "clear vision" and "prudent risk-taking."
- Santander is one of the few European lenders not regularly publishing its capital ratio under Basel III rules, and the elder Botin said in January the bank would aim for a capital ratio under that standard of 9% by year-end.
Wed, Sep. 10, 12:00 PM
- As has been long-expected, Ana Botin is appointed to replace her father as board chairman at Santander (SAN -0.6%).
- Though no surprise, the move could face some criticism given the questioning of European banking dynasties amid the scandal at Portugal's Banco Espirito Santo. "Succession shouldn't just be saying 'my daughter's going to take over," says a corporate governance expert.
- On the other hand, says a fund manager, continuity could be an asset: "The key issue is whether or not family control is a good or a bad thing. Ultimately this depends on individuals and [Botin's] daughter is a chip off the old block."
- Previously: Santander shares down after chairman dies
Wed, Sep. 10, 6:20 AM
- Shares of Banco Santander (SAN, BSBR, BSAC, OTCQB:BCDRF) -1.2% premarket following news that 79-year-old chairman Emilio Botin died of a heart attack on Tuesday night. (press release)
- Under his tenure, Santander grew through aggressive acquistions, and through the introduction of novel banking services. Today, SAN is the largest bank in the eurozone by value.
- But analysts still question the lender's capital position, with much of its strength in its many subsidiaries.
- His death raises the question of succession. Botin's share in the bank isn't large enough to guarantee his daughter Ana's control. (BBC)
Mon, Aug. 18, 3:47 AM
- Eurozone banks are expected to borrow about €250B in cheap four-year money from the European Central Bank in September and December under the ECB’s "targeted long-term financing operations".
- The new loans would come on top of the more than €1T in cheap finance the ECB pumped into the financial system between late 2011 and 2012 to avert a financial crisis.
- The new funds are expected to boost lending to the region’s credit-starved businesses.
- Europe’s economic outlook has not been pretty. Last week, figures outlined a slowdown in Germany and France and Italy in recession.
- Related stocks: SAN, DB, IRE, CS, ING, BBVA, BCS, RBS, HSBC, LYG
- ETFs: EUFN
Tue, Aug. 12, 11:59 AM
- Brazil's money laundering probe linked to state-run Petrobras (PBR -1.2%) is spreading to financial institutions as prosecutors investigate whether they met compliance requirements.
- Court documents cite units of banks including Citigroup (NYSE:C), Banco Santander (NYSE:SAN) and HSBC, as well as Brazil-based Itau Unibanco (NYSE:ITUB) and Banco Bradesco (NYSE:BBD) as holding accounts or executing operations linked to the alleged laundering of 10B reais.
- The refining division at Petrobras already is under investigation for runaway spending including alleged inflated contracts to suppliers, and is cited as one of the possible sources of cash being laundered in the case dubbed “Car Wash” by police.
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