Spain

How Ana Botín can defeat the Santander sceptics

21 Dec 2022

The Spanish bank suffers from a lower valuation, relative to its return on tangible equity, than rivals. If its executive chair can keep costs low and show the group is worth more than the sum of its parts, that might change. If not, it’s time to sell assets, starting in the U.S..

European banks’ perfect moment will prove fleeting

26 Oct 2022

Rates are rising, traders are busy, and customers are paying their debts. That helpful backdrop helped Barclays, Deutsche and Santander average a punchy 11% return on tangible equity so far in 2022. But with recession looming, and bad-debt buffers looking low, it may not last.

Bank mortgage tweaks presage bigger political hit

14 Oct 2022

Spain’s CaixaBank proposed a rate freeze, while UK lenders favour ad hoc relief for struggling borrowers. As interest costs soar, these won’t be enough to avoid a mess. Since cash-strapped governments can’t help, they may hammer banks with Polish-style blanket payment holidays.

Spain’s ropey bank tax will have European copycats

13 Jul 2022

The country’s left-wing government is raiding banks for 1.5 bln euros a year. Taxing lenders based on their future benefits from rising interest rates represents shaky logic. But with inflation soaring across Europe, such populist measures will become more enticing.

Santander picks anti-Orcel as new CEO

17 Jun 2022

After bungling the hiring of the former UBS banker in 2019, Executive Chair Ana Botín and the board have picked a safe choice in Héctor Grisi. The insider won’t require a hefty payout and has experience running a retail bank. He’ll need it given Santander’s lowly share price.

Zara owner has $10 bln for online shopping spree

18 May 2022

Marta Ortega, the fresh-faced boss of the world’s largest fashion retailer, is sitting on a record cash pile. Typically, such spoils trickle back to shareholders as special dividends. But with its battered share price, buying an online upstart like Zalando may create more value.

Windmill makers’ vicious cost cycle has an ending

5 May 2022

Denmark’s Vestas and rival Siemens Gamesa have failed to turn booming demand for wind farms into higher earnings. Increased prices to offset soaring raw material costs will take several years to kick in. But now wind power is cheaper than fossil fuels, price pressures are easing.

Spanish telco M&A piles pressure on Vodafone

8 Mar 2022

Orange and KKR-owned MasMovil are in talks over a 19.6 bln euro merger in Spain. The bold move will test EU competition watchdogs’ opposition to consolidation. It also looks like a missed opportunity for the UK telco’s CEO Nick Read. He now needs a deal in Britain or Italy.

Barcelona’s 5G hype is recipe for hyperventilation

4 Mar 2022

Telecoms bosses converged on the Spanish city this week after a two-year hiatus. From robot dogs to holographic compères, the tech-fest painted a utopian view of a wired future. For CEOs like Vodafone’s Nick Read, the difficulty is making it happen while also making money.

Naturgy split may be less than sum of its parts

11 Feb 2022

The 25 bln euro Spanish power group is putting renewable energy and gas under one roof and fencing off its regulated network business. It could create value if investors see gas as less worthy of a discount than they have in the past. But that’s a pretty big if.

Siemens Gamesa’s new Mr. Fixit can take his time

3 Feb 2022

The wind turbine maker has ousted its second CEO in two years. As another German, Jochen Eickholt may get a frosty reception from Spanish bits of the firm. Parent Siemens Energy won’t mind. The longer Gamesa’s woes drag on, the easier it will be to buy out minority investors.

Santander’s U.S. clinginess has a share price cost

2 Feb 2022

The 55 bln euro bank is keeping its American unit, unlike rivals BBVA and BNP. Full-year results show Chair Ana Botín is running it well, and she has plans to keep it growing. But investors give her scant credit. If that persists, the pressure to sell will become overwhelming.

Siemens Energy wind fix would be worth the money

28 Jan 2022

The German group may buy out minority investors at struggling wind-turbine subsidiary Gamesa. The 5 bln euro bill sounds steep, especially as the problems may be temporary. Yet Siemens Energy can afford it, and it would get to keep the upside for itself when wind power scales up.

Italy telco deal would open European floodgates

25 Jan 2022

Vodafone and Iliad may merge their Italian units, cutting the number of operators in the country to three. EU competition boss Margrethe Vestager has less scope than previously to scupper such a tieup. Copycat consolidation in Germany, Spain, France and Britain could follow.

KKR sends strong buy signal on European telecom

17 Dec 2021

The private equity firm is paying 1 bln euros for half of a Spanish fibre-optic network at a multiple of 22 times EBITDA. It already owns Madrid-based Masmovil, tilted at Dutch operator KPN in May and is stalking Telecom Italia. Eventually, public investors will get the message.

Andrea Orcel’s moral victory weakens Ana Botin

10 Dec 2021

A court awarded the Italian banker 68 mln euros as compensation for Santander’s sloppy U-turn on making him its CEO. The Spanish bank will appeal. But the ruling vindicates Orcel’s decision to fight, while reviving doubts about Santander’s chair, and the rest of the board.

Inditex injects doubt into smooth-running machine

30 Nov 2021

Spain’s $100 bln fast fashion group replaced Executive Chairman Pablo Isla with founder Amancio Ortega’s daughter, Marta. Its valuation reflects investor faith in Isla’s digital strategy, which helped Inditex weather Covid-19. The abrupt pivot to untried leaders will test that.

BBVA’s Turkey M&A logic beats currency chaos

24 Nov 2021

Just before the lira’s plunge, the Spanish bank offered to buy the 50% it doesn’t own of local lender Garanti. The crisis will push up bad debt and squeeze lending margins. But the target’s low valuation and the inefficiency of only owning half give BBVA reason enough to proceed.

Viewsroom: European bank M&A, De-Dutching Shell

18 Nov 2021

Big lenders in the euro zone are doing deals, but not the kind investment bankers dream about. BNP Paribas is in U.S. retreat, BBVA bulks up in Turkey and KBC goes Bulgarian. Liam Proud explains. George Hay explains why the Anglo-Dutch oil major is dropping the Dutch bit.

EU banks march east towards muddy investment case

15 Nov 2021

BBVA may take full control of its Turkish unit for 2.2 bln euros and KBC is spending 1 bln euros on a Bulgarian rival. There’s logic to the deals. But boosting emerging-market risk and geographic sprawl carries a valuation penalty. Investors would rather have the cash themselves.