Would you buy shares in Santander?

Voyager2002

My answer to the above question is a resounding 'no': surely a company that is so universally detested; treats its clients with contempt; and generates record numbers of complaints to the regulators cannot be a good investment opportunity.

However, I have recently been looking at investing in Funds, and have been surprised at how many of them have substantial holdings in Santander. For example, I like the look of Fidelity's "Euro Blue Chip" fund, but they have a large holding in Santander, and I cannot imagine why they regard it as being a 'blue chip' company. Does this mean that fund managers simply look at short-term financial reporting and are unaware of the nature of the businesses they hold? Or is there a credible argument that this bank represents a good long-term investment?

Your ideas would be welcome.

cloud_dog

Voyager2002 wrote: »

For example, I like the look of Fidelity's "Euro Blue Chip" fund, but they have a large holding in Santander, and I cannot imagine why they regard it as being a 'blue chip' company.

Ummm, because it makes nice profits by treating its customers with contempt and can pay a nice dividend.

alanq

Is it "universally detested"? I know that it has a terrible reputation in Britain but Britain is not the only place it operates.

I had bad experiences of customer service with Abbey National as a building society and a plc and ceased to be a customer. Much later when I did try to open an account I had very bad customer service and didn't proceed. When my Bradford & Bingley fixed term account matures I certainly won't be staying with Santander.

Perhaps the problems originate in Britain but even if that's the case, it's about time that Santander sorted them out or the UK company will suffer the consequences as customers vote with their feet.

LongTermLurker

Sometimes it's the worst "people companies" that make the best investments. It's all about marketing and business accumen and if they can grow the business and profits, it makes for a good investment.

Enticing people in (who don't necessarily read these forums) and providing a handful of low-paid advice monkeys makes for potentially high income and low expenditure, which hopefully translates into higher profits, more growth and higher dividends.

I don't know what their position is in Europe, or from a business perspective, but these could also prove to be higher revenue generators than the UK. I think the main thing to remember is that Abbey & A&L had low levels of customer satisfaction before Santander came into play and the internal systems are likely not fully amalgamated yet. A&L staff will still, to a degree, be working the same as they've always done and if they were brought up to look down on customers, they will probably continue to do so.

datostar

Voyager2002 wrote: »

However, I have recently been looking at investing in Funds, and have been surprised at how many of them have substantial holdings in Santander. For example, I like the look of Fidelity's "Euro Blue Chip" fund, but they have a large holding in Santander, and I cannot imagine why they regard it as being a 'blue chip' company. Does this mean that fund managers simply look at short-term financial reporting and are unaware of the nature of the businesses they hold? Or is there a credible argument that this bank represents a good long-term investment?

Your ideas would be welcome.

Santander regularly pays the highest dividend of any European Bank. UK Shareholders currently hold CDIs (Crest Depository Interests) each of which represents entitlement to a share in Banco Santander Centrol Hispano S.A. Current dividends reflect much more of the Bank's trading interests outside the UK, which is a relatively new venture for them and clearly has its teething troubles. Recent news indicates that the UK operation may soon be floated as a separately quoted UK company. It remains to be seen whether existing Banco Santander S.A. shareholders in the UK will be offered any incentive to transfer their holdings to the new UK company. Funds with holdings will no doubt be watching carefully.

Santander certainly qualifies is a 'blue chip' company, arguably the most successful European Bank at present.

turbobob

Growth through acquisitions has been the hallmark of Santander’s strategy since Botin, 75, took over as chairman in 1986. He turned the sixth-biggest lender in Spain into the largest by market value in the euro region through more than $70 billion of takeovers, raising profit 67-fold, and amassing $1.5 trillion of assets, more than the gross domestic product of Spain.

http://www.bloomberg.com/news/2010-09-16/santander-s-10-billion-of-deals-stretches-its-mom-and-pop-banking-model.html

That increase in profit through their aggressive takeover strategy is one thing has made them a good investment in the past, although as the article points out there are concerns that they are not overstretching themselves if they continue the strategy.

The shares have gone up quite a lot since the early 90's

sabretoothtigger

They are continuing to buy up alot, recently rbs accounts. South america and all sorts. One the worlds largest and most successful banks

They are cheap because spain gilts are maybe a problem but I think they dont hold many so its not really a concern beyond maybe 1 bad year


Bad cs sounds about right. They sent me a special offer but refused to speak to me when I applied because I wasnt on the list, apparently it was sent in error and they keep mailing me to say I qualify even after the account is closed.
They taken over so many banks with varying computer systems, I bet its a right mess.

The main thing is are they able to improve and more importantly for profits, able to amalgamate and yield a profit. They have been very sound in previous deals and how they allocate capital against loans is well done. Its more important they dont hand out money to bad risks, they seem to be able to do that quite well and judge growth markets.

Nice dividend, pity its paid in euros which has gone down so much



If you dont like them, buy their bonds and become a creditor when they meet their certain demise
http://uk.finance.yahoo.com/q?s=SANB.L

8.6%

ESKIMO

Answer's on a postcard: 'No'.

I don't trust the Spanish. Look at the state of the EU at the moment.

I can't wait for our flippin' EU referendum malarkey to come round and rear it's ugly head. I for one will be voting with a definate 'NO' all the way!

I have a gut feeling that Spain will soon follow in the footsteps of Iceland, Greece and Ireland.

A storm is coming... literally 'doom and gloom'.

P.S. We are all going to die a slow and painful death, the icecaps will melt and i will have no home

No polar bears, no more fishing, no more 'Mr Woo' (my lead huskey)!

This, is a sad, sad day my friends.

swiss69

I wouldnt worry too much about how good their customer service is. BAT industries is a strong share performer and they arguably contrinbute to millions of premature deaths!

Santander have two priorities 1. Raising Revenues 2 Slashing costs.

If they do this well and operate a low cost/income ratio then they are a sound option.

However I would be concerned about Spain and Santander getting caught up in this and the fact that they have had to replace their CEO who had a very good reputation.

talexuser

I had experience with both A+L and Abbey and their customer service was really nothing to write home about then. Taking over those staff and then trying to get all the computers to talk to each other while maintaining low costs probably was the cause of Santander's reputation here.

NonGeographicalMan

ESKIMO wrote: »

I have a gut feeling that Spain will soon follow in the footsteps of Iceland, Greece and Ireland..

You forgot Portugal which will also be bailed out like Icleand, Greece and Ireland in due course.

Spain and Italy will be too big a mouthful for the EU to swallow and that will be when the whole Euro venture will die or implode or at least its many sick men countries will be cast out leaving only Germany, France, Belgium, Holland, Netherlands and Luxembourg as part of the Euro currency.

As to Santander I can only observe that both Easyjet and Ryanair both continue to get away with it although I have not travelled on either airline since 2002 when both airlines treated me atrociously. So it seems there are enough dumb mut customers out there and who just fall prey to aggressive advertising and low headline prices to keep these shockingly bad companies will still do well in business and see their share prices rise. Speaking of which I of course obviously regret selling my shares in Ryanar in 2002 when they denied me boarding on a flight to Palermo at Stansted airport even though I had got to the airport check in desk area 42 minutes before the flight but they had closed the check in early. Yet only the other day I got to the Palma airport for a Monarch flight check in with only 33 minutes to go (there was a break down at the airport car rental car park barrier that made it impossible for me or other customers to get in to the car park for 20 minutes) and they had no trouble at all in checking me in. So I am still clear why it is that I no longer fly with Easyjet or Ryanair as a customer.

I should add that I also hold 100 Santander UK CDI shares as a former Abbey de mutualisation shareholder but as I have mislaid the original Abbey certificate and will get stung with £20 for a letter of indeminity it hardly seems worth selling, especially in view of the dismal share price performance over the last couple of years. I sold my nearly £14,000 of Hargreaves Lansdown shares yesterday because my gain was about to exceed the annual capital gains tax limit and the share price has gone up so much more than the market since float that their particular bubble may well eventually burst (especially with Hargreaves and Lansdown now both retiring). Hargreaves Lansdown is another company with a shockingly bad attitude towards customer complaints by the way as I have documented in another thread in this forum section earlier today. So sadly bad customer service often does not always equal poor share price performance.