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. 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.
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.
Santander aims to extend its presence by integrating its acquisitions. Its acquisitions in 2010 include SEB's German retail banking unit, 318 UK RBS retail branches, and a 70% stake in Poland's Bank Zachodni WBK.
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.
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:
|Financial Data||Banco Bilbao Vizcaya Argentaria (2008)||Banco Santander (2008)||La Caixa Group (2008)||Grupo Banco Popular (2008)||Banco Sabadell (2008)|
|Net Interest Income (in USD millions)||16,148||29,360||4,773||3,449||1,975|
|Gross Income (in USD millions)||25,821||46,693||9,187||--||3,029|
|Net Operating Income (in USD millions)||8,369||24,122||3,546||1,785||503|
|Income before tax (in USD millions)||9,424||--||3,559||1,988||1,516|
|Net Income (in USD millions)||7,327||25,885||2,452||--||916|