Banco Santander SA Returns To Growth

Global bank Banco Santander SA (LON:BNC) is a buy for me.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

santander

Banco Santander (LSE: BNC) (NYSE: SAN.US) is one of the world’s few truly global banks. It was originally a regional bank in Northern Spain. It now has businesses out across Europe, Latin America, North America and Asia. By market capitalisation, it is one of the world’s leading banks. I think it has the potential to be a very good investment.

Trading at book value

Over the past seven years this company has had a rocky ride, with the share price tumbling during the credit crunch, rising and then tumbling once more during the eurozone crisis. Just how cheap are the shares now? Well, the company trades at almost exactly book value. I think this makes the shares a real bargain.

Profitability has taken a knock in recent years, with earnings per share falling dramatically. But it is expected to recover strongly, as the bank’s recovery from the eurozone crisis gathers momentum.

Prior to the credit crunch, Banco Santander was one of the world’s fastest-growing financial companies, as it acquired a range of banks around the globe, building a broad portfolio of businesses across both developed and emerging markets.

Profitability will now surge ahead

This growth went into reverse in 2010, but I am hopeful that profitability, and thus the share price, will now push ahead, as a range of factors coincide: the world economy is recovering, investor sentiment towards banks is warming, and there is a contrarian surge in share prices in mainland Europe. Bad debts are being reduced, the housing market is growing, and interest rates will eventually increase.

As the bulk of its business is as a retail bank and mortgage provider, Banco Santander will benefit from all these trends.

Banco Santander’s share price chart shows a downtrend which bottomed in 2012, and the beginnings of an uptrend. In my view, this might be the ideal moment to buy Banco Santander shares.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

> Prabhat does not own shares in Santander.

More on Investing Articles

Investing Articles

After it crashed 25%, should I buy this former stock market darling in my Stocks and Shares ISA?

Harvey Jones has a big hole in his Stocks and Shares ISA that he is keen to fill. Should he…

Read more »

happy senior couple using a laptop in their living room to look at their financial budgets
Investing Articles

How’s the dividend forecast looking for Legal & General shares in 2025 and beyond?

As a shareholder, I like to keep track of the potential dividend returns I could make from my Legal &…

Read more »

artificial intelligence investing algorithms
Investing Articles

Could buying this stock with a $7bn market cap be like investing in Nvidia in 2010?

Where might the next Nvidia-type stock be lurking in today's market? Our writer takes a look at one candidate with…

Read more »

Investing Articles

Is GSK a bargain now the share price is near 1,333p?

Biopharma company GSK looks like a decent stock to consider for the long term, so is today's lower share price…

Read more »

Snowing on Jubilee Gardens in London at dusk
Investing Articles

Could December be a great month to buy UK shares?

Christopher Ruane sees some possible reasons to look for shares to buy in December -- but he'll be using the…

Read more »

Young mixed-race couple sat on the beach looking out over the sea
Investing Articles

Sticking to FTSE shares, I’d still aim for a £1,000 monthly passive income like this!

By investing in blue-chip FTSE shares with proven business models, our writer hopes he can build sizeable passive income streams…

Read more »

Growth Shares

BT shares? I think there are much better UK stocks for the long term

Over the long term, many UK stocks have performed much better than BT. Here’s a look at two companies that…

Read more »

British Pennies on a Pound Note
Investing Articles

After a 540% rise, could this penny share keep going?

This penny share has seen mixed fortunes in recent years. Our writer looks ahead to some potentially exciting developments in…

Read more »