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Trampa501

Journalist Puts Pension Money On Santander

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Umm, even I would hesitate about a) doing this and b ) B) writing about it. He's been Finance Editor since 1986 - does he have a good track record?

Why? Everybody knows the Spanish property market has slumped and Santander must be exposed to bad debts there. What is less well known is that it has largely avoided the nightmare of investment banking and stuck to its knitting with the much less risky business of retail banking where – with 14,000 outlets – it has the biggest branch network in the world.

Another plus point that is not fully reflected in the share price is its substantial exposure to the rapidly-growing economies of Latin America. For example, its latest accounts show it generated more profits in Brazil than Spain. In any other sector, these emerging market growth prospects would justify a premium rating but Santander’s price/earnings (P/E) ratio – or the number of years’ earnings per share needed to pay for its price today – is less than half that of HSBC and not much better than half that of Standard Chartered.

Remarkably, Santander’s P/E valuation is currently lower than Barclays and is the lowest of any major bank – despite Santander being the third biggest bank in the world in terms of profits. While other banks have collapsed since the start of the credit crisis, Santander has quietly picked up rivals at distress valuations. It added Alliance & Leicester and the savings book of Bradford & Bingley to its Abbey operation to become the third biggest savings institution in Britain.

Edited by Trampa501

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TelegraphBlogLink

Umm, even I would hesitate about a) doing this and b ) B) writing about it. He's been Finance Editor since 1986 - does he have a good track record?

spinny spinny spin spin. Who cares where its profits are. It has enormous exposure to commercial debt, both inside and outside the domestic real estate market and is one of the worst in Spain for refusing to mark anything to market...... the analysts have it right, there is a damned good reason it is seen as far far riskier than say a decent German bank (as a measure of a default risk). I would keep well well away from it.

Remember, people were still tipping NRK and ICESAVE until they fell - both as a share and as a safe haven - step forward Mr Lewis....

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than say a decent German bank

Which are?

I'm sure that some German banks are safer than others. Remember that German banks have already had to be bailed out (eg IKB bank). Difference is, I suppose, that the German authorities have more financial clout to do this.

german bank bailouts

The bailout of German banks hit by the financial crisis is likely to cost between €34bn ($44bn) and €52bn, according to a study conducted for the Initiative New Social Market Economy.

The study, released yesterday, estimates that the costs will amount to 1.4% to 2.2% of gross domestic product in Germany, or €417 to €632 per capita. It also recommends that the government gradually divest its shareholding in banks.

"When comparing the costs in Germany with all other banking crises [of the past], Germany is at the lower end," said Christoph Kaserer, economics professor at the Technische Universitaet in Munich and author of the study.

The bailout of banks in Sweden cost around 4% of GDP, the savings and loan crisis in the US in the early 1980s cost 3.7% of GDP, while the big banking crisis in Japan dented GDP by between 10% and 20%, Kaserer said, citing estimates.

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Emerging market indices are expected to suffer a deep plunge over the next few months, so I guess that will tie in with Santander's exposure to S America.

LOL - noone on this site has a good word for any bank or banker do they?

You may well be right about a setback for Santander when emerging markets correct and I hate the way private debt has been dumped on the wider population just like everyone else.

However, the tendency on here to always look for (wish for?) an 'ah yes, but this why they will fail despite everything' angle when discussing even the most successful and prudent bank/hedge fund/insurance company is a bit lame.

Slight aside, on the subject of putting money on things - just bought a few more k of gold and silver on BV whilst watching armoured cars aflame in Cairo. Seems like a fairly safe bet. Sorry if this seems tasteless but I do have a wife & family to consider and savings accounts are returning FA right now.

Did look for a thread about Egypt's unrest and the affect on our economy but I couldn't see one.

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However, the tendency on here to always look for (wish for?) an 'ah yes, but this why they will fail despite everything' angle when discussing even the most successful and prudent bank/hedge fund/insurance company is a bit lame.

To be fair you also get some well-argued informed discussion here at times. I was hoping for some history on this Ian Cowie - he's certainly been at the Telegraph a long time. But time will tell whether his judgement is sound on this particular issue - not a load of posters bleating "it's all going to fail". I see Santander's results are due out on Thursday (the other big bank BBVA also publishes its results this week). No doubt if results look bad, posters will be saying "I told you so" and if the results are good "don't believe a word of it, they're hiding something etc".

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LOL - noone on this site has a good word for any bank or banker do they?

You may well be right about a setback for Santander when emerging markets correct and I hate the way private debt has been dumped on the wider population just like everyone else.

However, the tendency on here to always look for (wish for?) an 'ah yes, but this why they will fail despite everything' angle when discussing even the most successful and prudent bank/hedge fund/insurance company is a bit lame.

Slight aside, on the subject of putting money on things - just bought a few more k of gold and silver on BV whilst watching armoured cars aflame in Cairo. Seems like a fairly safe bet. Sorry if this seems tasteless but I do have a wife & family to consider and savings accounts are returning FA right now.

Did look for a thread about Egypt's unrest and the affect on our economy but I couldn't see one.

Plenty of very safe and very good well run banks in the world that would highly likely survive under extreme conditions such as a state defaults or 90% asset crash.

Basically these are banks with low commercial lending, low mortgage exposure, low interbank lending, high Capital ratios and low exposure to government bonds in countries with high national debt. (E.g. USA, UK and other western countries)

If you want a really safe bank very likely to survive even the most extreme conditions you need to do proper homework, ie not, "oo look they are big with huge assets and have been around a while they must be safeish", clearly every high street bank in the UK fails the above criteria including Santander. Most of these safe European banks are not available to the average punter unfortunately, they used to be, they were called BSocieties, which is criminal in itself but im pretty sure at least some of the smaller BS/mutuals in the uk must satisfy some of the above criteria, Ironically the US is probably by far the best country in the world for choice of safeish banks for most people because whilst some of their local banks are basket cases others are really very strong on the above and accessible by all

This bloke may do very well if there isnt a crash, if there is a major one hes probably fcked, its a strange asset allocation putting it all on the finance sector when as a journo of a major paper, he probably has decent savings already exposed to the sector

Edited by Tamara De Lempicka

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I was hoping for some history on this Ian Cowie - he's certainly been at the Telegraph a long time.

Sorry I can't recall specific examples. I have read some of his columns over the last year or so, and these days I don't go there for investment advice, I go there with a kind of morbid curiosity as to what form of financial suicide he's suggesting this time. I read the Santander one and shuddered. To give him credit, he did back it up with at least a plausible argument.

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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