blog

Update: Santander Posts 4.73 Billion Euro Profit for 1H2008

by Tricia

Yesterday, Santander's first half results went out over European wires, showing a net profit of 4.73 billion euros (about US$ 7.5 billion). A moderate decline in its domestic market was offset by double-digit growth abroad, in the UK and Latin America, and the sale of its holdings in two European commercial banks, Intesa Sanpaolo of Italy and BPI Portgual. Santander seems also to have navigated around the global credit snafu that is afflicting many of its global peer group -- owing to a pretty stringent regulatory environment and conservative lending policies.

I admire Santander as a case study in how to make money abroad when your home market is slowing down. Profits are up 20% in both the UK and Latin America, to 485 million pounds and 2.17 billion, respectively. Santander, to my mind, has been exceptionally sure-footed in its global expansion strategy, shedding as efficiently as it acquires to streamline growth around its core strengths. It has been absolutely fearless in penetrating Latin American financial services, where the national infrastructures and regulatory environments are still developing.

The numbers support an emerging view that the bank is positioning itself to command top dollar for Santander Asset Management, and raising a little money for another purchase abroad -- but let's wait and see. I also thought the Yankees were gonna win last night.