Don’t forget about Spain

IT SEEMS too good to be true. Spain has suffered one of the worst housing downturns in the world, yet its biggest bank is booming. Santander has its Latin American operations to thank for that, in particular its Brazilian bank.

Cherry-picking the best bits of Britain’s mortgage books during the depths of the financial crisis hasn’t hurt either.

The bank is also reducing loan losses more quickly than rivals, leading several analysts to upgrade earning yesterday.

Spain should not be forgotten, however. Although it only accounts for about 25 per cent of revenues, there is no getting away from the fact that the Greek fiscal crisis could soon spread. That would lead to a sharp fiscal contraction in Spain, with a knock-on effect for demand for Santander’s products.

Analysis by David Crow