Comments on: Why Spain’s Largest Bank Has Big Potential

By: Rebecca Lipman

Rebecca Lipman — Fri, 08 Jun 2012 17:50:44 +0000

You can find all this data on the Company Snapshot on Kapitall: https://www.kapitall.com/?tool=CompanySnapshot&pa…

By: jetmech

jetmech — Fri, 08 Jun 2012 17:00:31 +0000

I don't see the report from Zacks research regarding your comment of a "price target of $14.93 – a potential upside of 151.7% – and average risk levels." The last report Fidelity has, Zacks has it at underperform.

By: Special K

Special K — Fri, 08 Jun 2012 12:27:15 +0000

I think STD is a good buy, however, there are a lot of things we do not know. STD core tier 1 ratio is around 10%, healthy but fragile. A few billion unexpected event cant make this drop below 8 or 7% and this level is quite critical. We should talk about buffer Core tier 1 ratios and not whole ratios, since problems start when this falls below the critical level. In STD case their buffer may be 2 or 3% (10-8 or 7%). STD has low price to book, high yield and godly diversification. However there is leverage working against it and a backdrop of massive uncertainty concerning one of the traditionnally safe asset that is hoarded on bank and customers balance sheet at 100% face value : Spanish bonds.

Facing this situation, for similar valuations, twice better core tier 1 ratios in high interest, low debt, solid growth Brazil economy, BSBR is much more safe and promising than STD. Please also note that STD trouble can hurt BSBR in the sole following way : forcing STD to sell BSBR shares to another party. STD can't ''steal'' or borrow unfairly from BSBR due to their corporate structure.

Be extremely careful, what looks cheap and is leveraged was often purchased by value investors only to teach them later about why and when it would justifiably go cheaper amid trouble in excess of what was visible!

By: John Howenstine

John Howenstine — Fri, 08 Jun 2012 11:26:06 +0000

Well, I'd like to believe it, but doesn't that make Santander the only large bank on the planet without problems. Bank stocks are not worth the risk right now. JPM proved that.

By: Albert Philion

Albert Philion — Fri, 08 Jun 2012 10:46:09 +0000

unable to comment

By: Barry Johnson

Barry Johnson — Thu, 07 Jun 2012 23:50:47 +0000

Interested readers might also see the recent (last month or two) special report on banking in The Economist. Santander is mentioned several times, including pointing out that it is the most operationally efficient bank globally, largely due to its relentless standardization of systems, etc, across all of its global operations.