Selby Jennings’ Post

In the financial year 2022, Banco Santander’s net result, as well as its profitability ratios have improved slightly mainly driven by vividly growing net interest income that translated into a net income growth of 11.5%. Given its retail heavy business mix, we expect the higher rate environment to provide an earnings tailwind also in 2023 and beyond. Overall, the bank’s earnings profile, that benefits from very high net financial margins and best-in-class cost efficiency metrics, remains a key rating strength. Furthermore, the bank’s rating is supported by a good sub-score on asset risk. Thanks to the scale of its operations, Santander’s banking book is highly diversified across geographies, industries and product groups. The rating of Banco Santander S.A. is prepared on the basis of group (Banco Santander S.A.) consolidated accounts. The bank's rating remains negatively influenced by the high exposure to Spain and the rating of the Kingdom of Spain (A-/stable), CRA Sovereign Rating as of 15 July 2022). This confines the Long-Term Issuer Rating of Banco Santander S.A. and its subisidiaries to A-.   Key Rating Drivers • Globally diversified banking franchise with strong market positions in Spain and several emerging markets • Very good sub-score on earnings primarily explained by a very high net financial margin (NIM) and best-in-class cost efficiency levels • Moderate levels of capital compared with peers, but still sufficient CET1 buffer • Diversified funding mix including a large customer deposit base complemented by a comfortable liquidity position mitigates refinancing risk • Due to high domestic exposures, the rating remains capped at the level of the Spanish sovereign   Rating Report: https://bit.ly/3D80ywB   #Rating #Creditreform #Santander #finance #banking

It's bank results season. Spanish bank Santander beat forecasts on Wednesday with a 20% rise in third quarter net profit as a strong performance in Europe offset weaker trade in the United States and higher provisions. Santander has relied on Latin America in the past to cope with tough conditions in Europe, but is now benefiting - like European rivals - from higher interest rates on its home continent. #financialperformance #growth #banking Tomás Gimeno Alberdi

How to get exposure to Turkey, Mexico, and South America by investing in only one stock? The answer is straightforward: Banco Bilbao Vizcaya Argentaria BBVA. I am excited to share my last report dissecting BBVA's business and finances. #emergingmarkets #bbva #bankingindustry #turkeybanks #mexicobanks

Spain 2nd largest bank BBVA (10/5/24: $60 billion market value) $12.9 billion (EUR 12 billion) all-share offer for the 4th largest bank Banco de Sabadell has been rejected by the Banco de Sabadell board. Read - https://lnkd.in/gAp4dveY follow Caproasia | Driving the future of Asia Spain 2nd largest bank BBVA (10/5/24: $60 billion market value) $12.9 billion (EUR 12 billion) all-share offer for the 4th largest bank Banco de Sabadell has been rejected by the Banco de Sabadell board.  BBVA (9/5/24): “BBVA’s Board of Directors is presenting an offer to Banco Sabadell shareholders so they can benefit from an exceptionally favorable proposal. The deal offers one BBVA share for every 4.83 of Sabadell, representing a 30 percent premium over the closing price of both banks on April 29th, and a 50 percent premium over the weighted average prices of the past three months. The transaction has very positive financial impacts thanks to relevant synergies and the complementarity and excellence of both banks. The operation will create one of the best banks in Europe, with a loan market share close to 22 percent in Spain. Furthermore, BBVA will maintain its current shareholders distribution policy and its commitment to distribute any excess capital above 12 percent.”

Is it possible that Santander UK could go bust? There are several factors contributing to the financial challenges faced by Santander in Europe and the UK. 1. **COVID-19 Impact**: The COVID-19 pandemic has had a significant impact on the global economy, and banks like Santander have not been spared. According to a report by [Reuters](https://lnkd.in/e87GCXYS), Santander UK's profit slumped by 38% due to the pandemic's impact on the loan book. 2. **Brexit**: The UK's departure from the European Union (Brexit) has also had a significant impact on Santander's operations. According to a report by [The Guardian](https://lnkd.in/ewq6EgHu), Santander UK took a £5bn profit hit from COVID and Brexit. 3. **Regulatory Challenges**: Santander has also faced regulatory challenges. According to a report by [Financial Times](https://lnkd.in/eXj7s-U3), Santander was hit with a €100m fine by the European Central Bank for capital shortfalls. 4. **Operational Issues**: Operational issues have also been a challenge for Santander. According to a report by [BBC](https://lnkd.in/ey4MFVZm), Santander UK was fined £33m by the Financial Conduct Authority for serious failings in its probate and bereavement process. While these challenges are significant, it's important to note that Santander is taking steps to address them. For example, the bank is focusing on digital transformation to improve efficiency and customer experience. It's also working to diversify its revenue streams and strengthen its capital position. Please note that while the bank is facing challenges, it doesn't necessarily mean it's on the verge of going bust. Banks often face periods of difficulty and have measures in place to manage these situations. It's also worth noting that banks are closely regulated and monitored by financial authorities to ensure their stability and protect consumers. #Santander #Banking #Finance #Economy #COVID19 #Brexit #InterestRates #Regulation (Note: This post is based on publicly available information and is intended for informational purposes only. It's not intended as financial advice.)

Latin America’s banks are finding that years of conservatism — along with investment in digital products — are finally starting to pay off Discover how LatAm banks are embracing digitalization and resilience in a challenging economic landscape: https://lnkd.in/daJaGsth #LatinAmerica BTG Pactual Roberto Sallouti Credit Suisse UBS Diego P. Masola Alvaro Vaqueiro BBVA en México Alexsandro Broedel Lopes Banco Itaú Florence Pourchet BNP Paribas CIB

Spain 2nd largest bank BBVA (10/5/24: $60 billion market value) $12.9 billion (EUR 12 billion) all-share offer for the 4th largest bank Banco de Sabadell has been rejected by the Banco de Sabadell board. Read - https://lnkd.in/g-YpX8jk follow Caproasia | Driving the future of Asia Spain 2nd largest bank BBVA (10/5/24: $60 billion market value) $12.9 billion (EUR 12 billion) all-share offer for the 4th largest bank Banco de Sabadell has been rejected by the Banco de Sabadell board.  BBVA (9/5/24): “BBVA’s Board of Directors is presenting an offer to Banco Sabadell shareholders so they can benefit from an exceptionally favorable proposal. The deal offers one BBVA share for every 4.83 of Sabadell, representing a 30 percent premium over the closing price of both banks on April 29th, and a 50 percent premium over the weighted average prices of the past three months. The transaction has very positive financial impacts thanks to relevant synergies and the complementarity and excellence of both banks. The operation will create one of the best banks in Europe, with a loan market share close to 22 percent in Spain. Furthermore, BBVA will maintain its current shareholders distribution policy and its commitment to distribute any excess capital above 12 percent.”

Today BBVA announced a hostile takeover targeting Banco Sabadell. It's yet another movement in the Spanish banking market towards duopolism. An oligopolist state was reached many years ago. For the sake of the customers, I hope this takeover won't succeed. If Banco Sabadell survives, I would strongly recommend it to canvas the Eurozone, even beyond, looking for banks with similar size, strengths, liabilities. Rather than risking to be taken over by a national competitor, reducing competence, it would be more interesting, in many ways, to create an international conglomerate of banks. I would put a limit to one bank per country, and, well, I don't know how could this could be implemented (I skipped class that day), but I don't dislike the idea of a unique listed company, like a shell or umbrella, protecting all members, and, at the same time, being their hardest consultant and supervisor, their friendly coach, and useful help when it comes to common activities, i.e., European regulatory requirements... Obviously, every bank would keep its name and operative policies in its territory, and their quota would be periodically adjusted in a symbolic way, in case some entity loses grip with the rest. Admission could be open to banks that fit the requirements anytime. And that's how I picture an "optimal" European banking market synergy-seeking concentration, without creating near-monopolistic oligopoles in every country. Perhaps this is just a Spanish problem, but if I were the bank, name it Banco Sabadell , Unicaja , Ibercaja , ABANCA ,... I would explore this approach. #UnsollicitedOpinions

The #Banking sector in many economies - including here in the #Americas - is quite concentrated. What does that mean for lending, interest rates and the economy as a whole? In a new Bank for International Settlements – BIS working paper, Gustavo Joaquim (Federal Reserve Bank of Boston) Jose Renato Ornelas (Banco Central do Brasil) and our very own Bernardus Doornik investigate this, with a novel administrative dataset for #Brazil. With a difference-in-differences approach they show that a reduction in bank competition increases lending spreads (ie the difference between lending and deposit rates) and shrinks credit volume. This has real costs: output in Brazil could be 5% higher if bank competition rose and spreads fell to world levels. https://lnkd.in/e9X3fCKT #Competiton #Banks #Mergers #Research

The disaggregation of banking services has been happening for a while. For traditional banks seeking to adapt, there is a continuum of strategic choices. These choices are only a handful, and they are not all mutually exclusive. European banks view this trend as more of a threat compared to their U.S. counterparts*, partly because of the regulatory regime. This attitude influences strategic decisions. For example, most U.S. banks would shy away from launching greenfield projects akin to Banco Santander's Open Bank but would hesitate less when considering choices towards the left of the continuum. So, what makes the difference between success and failure? In my view, it's the bank's readiness. An objective assessment of potential inhibitors of success (e.g., BaaS crackdown in the US) as well as opportunities (e.g., lower-cost deposits from underserved segments) is essential. The assessment must cover a broad set of parameters that are key to success. This, along with the right executive sponsorship, increases the likelihood of successful execution. *credit: The Economist survey