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Banco Santander SA ADR SAN

Rating as of

Morningstar’s Analysis

Valuation
Currency in USD
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Santander Capital Allocation Rating: Standard

Johann Scholtz, CFA Equity Analyst

Analyst Note

| Johann Scholtz, CFA |

We give Santander a Standard capital allocation rating. We do not believe that Santander has any competitive advantages in its U.S. retail banking operation or in its U.K. retail banking business. Both businesses also earn returns materially below their cost of capital. Santander, however, views these businesses as core to its operations. We believe Santander should exit these businesses. It could potentially free up capital to strengthen Santander’s weak balance sheet. In our view, Santander’s shareholder distribution policy is appropriate. We maintain our narrow economic moat rating and our EUR 4 per share fair value estimate.

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Company Profile

Business Description

Santander's focus is on retail and commercial banking. Latin America is geographically the largest operation, with Brazil by far the largest. Its continental European business is still mainly Iberian. Santander’s U.K. presence is the result of the acquisition of building society Abbey. In the U.S., Santander operates a vehicle finance business and a regional bank focused on the Northeastern states.

Contact
Avda. de Cantabria s/n, Boadilla del Monte
Madrid, 28660, Spain
T +34 912596520
Sector Financial Services
Industry Banks - Diversified
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type
Employees 190,751

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