Ana Botin, the Group Executive “Chairman” of Banco Santander (SAN) was exceptionally pleased with the recent quarterly results, reports Benj Gallander, editor of Contra the Heard.
She stated, “The recovery of our business is progressing well, and the third quarter was significantly stronger than the second. Revenues increased 18 percent in constant euros as activity returned close to pre-pandemic levels, loan loss provisions fell 14 percent and we continued to reduce costs ahead of plan.”
In addition, she is confident that a return to dividends is in the cards in 2021. The corporation had paid them for years, but European banks were restricted in 2020 because of havoc caused by COVID-19. Resuming the payout would be enchanting, and likely boost the stock price handily.
While a fast return to the level of $0.16 a quarter like in 2014 is unreasonable, a reintroduction on a quarterly basis of a penny or three seems realistic.
The “Santander Way” appears to be working, even with pandemic knocks. The corporate values of “Simple, Personal, Fair” are not particularly novel, and stating them is of course far differently than living them. But the bottom line is black as it almost always is and that is a very yummy thing.
SAN primarily operates in 10 countries. It is the largest bank in Spain and #3 in Brazil. While contributions come from Argentina, Chile, Mexico, Poland, Portugal, the UK, and the United States. Our contrarian logic suggests that the idea of "too big to fail" definitely exists here.
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The enterprise has its hand in a multitude of pies. Besides banking it offers insurance, payroll management, financial advisory services, rents retail properties and much more. Currently it operates almost 12,000 branches but plans are in the works to close about 1,000. That will likely lead to some write-downs.
The initial sell target of $8.24 is far less than the $20+ where this entity used to trade. The book value resides just south of $7.00. It would not surprise to see the stock price gain momentum quickly, as it is on the radar screens of many analysts and traders.
