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Banco Santander SWOT (and Foolanthropy)



December 06, 2010 – Comments (12) | RELATED TICKERS: SAN

For my latest bit of Foolishness, I took a look at Banco Santander (STD) to see if it might fit the pattern of a strong company with its share price pulled in to value territory by the European debt/financial troubles.

Santander is definitely a strong bank and trades in value territory. I also looked at the valuation compared to peers from markets outside the troubled Eurozone to see whether Santander is cheap compared to some other big, solid banks - if there's any such thing as a solid bank.

Since there's still lots of room on my previous match, I'll modify the pledge and match up to $50 of the Fool's dimes on comments posted to any of my articles or blog entries during the month of December.

Fool and Foolanthropy on!


12 Comments – Post Your Own

#1) On December 06, 2010 at 11:27 PM, Option1307 (30.41) wrote:

I like your article Russ, thanks for sharing!

I'd like to see Banco Santander trade down closer to its 52-week lows before considering a buy.

I agree that would make an excellent buying opportunity and we just may get there (or lower) depending on how this EURO "crisis" plays out in the near future. However, I'm not entirely sure we do stoop to those levels again and we did get resonably close last week when STD dropped into the 9's. That was low enough for me to grab a few sahres of STD. I really like their South American exposure as a way to achieve continued growth that will offset any European troubles in the near term. Also, STD is actually a decent bank as you sumamrized nicely in your article, they are only getting slammed recently b/c of the name association with Europe and the PIIGS specifically.



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#2) On December 06, 2010 at 11:28 PM, Option1307 (30.41) wrote:

Btw +.10 for charity!

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#3) On December 06, 2010 at 11:30 PM, Option1307 (30.41) wrote:

Holy geez we need a spell check/edit fxn on the fool, my bad, but I guess this is just more for charity!

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#4) On December 06, 2010 at 11:31 PM, Pennyperson (< 20) wrote:

Good investment period. The Euro won't collapse (my opinion) and the big 3 will see to it, especially Germany. Spain and STD shall survive - count on it. And with a little luck w/Euro worries from global investors this stock may even get a little cheaper = time to buy (for the long haul) and I will.

Nice blog and thanks. I believe.

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#5) On December 07, 2010 at 7:52 AM, lemoneater (57.24) wrote:

Thanks for your articles on banking. You help to demystify a sector that needs transparency to say the least.

I've wondered what the foreign equivalent to the FDIC is?

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#6) On December 07, 2010 at 9:05 AM, rd80 (96.69) wrote:

I've wondered what the foreign equivalent to the FDIC is?

Good question and I don't know the full answer. 

The Eurozone bank regulator is Committee of European Banking Supervisors - that's the organization that ran the stress tests for the European banks back in the summer.  However, I think its role is strictly regulatory, I don't believe there is a bank insurance component like the FDIC.


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#7) On December 07, 2010 at 9:43 AM, lemoneater (57.24) wrote:

Thanks for your answer.

While I'm extremely grateful for the safety net of the FDIC from a customer's point of view, I wonder whether our banks are more careless as a consequence.

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#8) On December 07, 2010 at 9:49 AM, lemoneater (57.24) wrote:

How much ownership and responsibility do bank managers feel in the US? Are there any George Baileys left? (It's almost time to watch "It's a Wonderful Life" again.)

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#9) On December 07, 2010 at 4:24 PM, rd80 (96.69) wrote:

I doubt FDIC insurance is much of a factor in how much risk bank management takes.  The main reason is the impact of a bank failure to management and shareholders is nearly the same with or without deposit insurance.  In both bankruptcy and an FDIC takeover, shareholders don't stand to get much (usually nothing) and management keeping their jobs depends on the new owners.

The FDIC does make a difference in how depositors fare and, probably, how much they investigate their bank.  As long as the FDIC logo is in the bank's window, depositors know they're covered.  That could play into management risk tolerance; if the FDIC didn't exist, people wouldn't deposit money in banks perceived as risky and choking off deposits would be a brake on risky behaviour.

That's only my semi-educated opinion.  I haven't done any research into how deposit insurance impacts risky bank practices.

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#10) On December 07, 2010 at 4:29 PM, lorteungen (99.66) wrote:

Each country has its own FDIC equivalent, there is no EU-wide insurance that I know of. 

I don't think the FDIC makes banks more careless. If anything it makes customers more careless because they can chase the highest yield and lowest borrowing costs with no regard to the financial health of the bank.

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#12) On December 11, 2010 at 6:05 PM, cmbourne (< 20) wrote:

The only prudent , honest ,reliable banks in the world are in Canada, which may be the world's most stable ,solvent country.

I predict a worldwide flight to safety for years to come.

I just bought RY.

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