Banco Santander, S.A., (SAN.MC, STD.N), is the largest financial group in Spain and Latin America, the largest bank in the eurozone by market capitalization, and the fourth largest in the world by profits.[1] It was founded in Spain in 1857. Geographically, it is divided into Continental Europe, UK, Latin America, and the US, and operates in the business areas of commercial banking, global retail banking, insurances and asset management, and global private banking.[2]

Business Growth

Santander's growth has been driven by maintaining a presence in both developed and emerging markets, with 35% of its profits coming from continental Europe and 59% of profits coming from Latin America.[3]

Santander aims to extend its presence by integrating its acquisitions. Its acquisitions in 2010 include SEB's German retail banking unit[4], 318 UK RBS retail branches[5], and a 70% stake in Poland's Bank Zachodni WBK.[6]

Trends and Forces

International expansion shelters Santander from Spain's deterioration

During 2010, the contribution of Santander's Spain and Portugal operations fell by €1.2 billion, a 35% decrease from 2009, due to decreasing demand in lending because of lower solvent demand, and higher provisions and pressure of spreads on deposits as a result of the economic downturn. Despite Spain's restructuring process, Santander was able to maintain profitability with its performance in other geographic regions, achieving profit growth in all other countries.[3]

Exposure to lending/credit risks

As Spain’s largest lender, Santander has high exposure to credit risk, and relies on accurately predicting how well its customers will repay their loans. The corporation must maintain proactive credit risk management and constantly weigh ongoing economic factors--should they overestimate its customers' ability to repay loans, the bank's overall performance will suffer.


Banco Santander faces strong competition within most areas of operations. Competition has increased for large demand deposits due to the deregulation of interest rates on deposits in Spain. The company's competitors include:

  • Banco Bilbao Vizcaya Argentaria with 48 million customers, 108,000 employees, a presence in over 32 countries, and over 8,000 branches, it is the second largest financial institution in Spain and ranks among the top seven largest financial institutions in the world in terms of market capitalization.[7]
  • La Caixa Group is considered the third largest financial entity in Spain, with 5,500 offices and over 10.5 million clients.[8]
  • Grupo Banco Popular is another leading financial institution in Spain, with 2,493 branches around the world, as well as the leading financial institution in Puerto Rico in terms of market share.[9][10]
  • Banco Sabadell R (BER:BDSB) is another leading financial institution in Spain, with 1,190 domestic branches and 80% of its income from retail banking.[11]
Financial Data Banco Bilbao Vizcaya Argentaria (2008)[12] Banco Santander (2008)[13] La Caixa Group (2008)[14] Grupo Banco Popular (2008)[15] Banco Sabadell (2008)[16]
Net Interest Income (in USD millions)16,14829,3604,7733,4491,975
Gross Income (in USD millions)25,82146,6939,187--3,029
Net Operating Income (in USD millions)8,36924,122[17]3,5461,785503
Income before tax (in USD millions)9,424--3,5591,9881,516
Net Income (in USD millions)7,32725,8852,452--916


  1. [1]
  2. [2]
  3. 3.0 3.1 2010 Financials Pg. 15
  4. [3]
  5. [4]
  6. [5]
  7. About BBVA Compass
  8. La Caixa
  9. Grupo Banco Popular - Our Branch Network
  10. Banco Popular North America - Who We Are
  11. BancSabadell - Executive Summary
  12. BBV 20-F 2009 Item 3 Pg. 8
  13. Santander Key Data 1Q 2009
  14. La Caixa Group 2008 Financial Report Pg. 40
  15. Grupo Banco Popular Annual Report 2008 Pg. 5
  16. Banco Sabadell Annual Report 2008 Pg. 29
  17. Santander Annual Report 2008 Pg. 2

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