The transaction was efficiently financed without the need to increase capital, with the sale and leaseback of property in Spain for €1.076bn net gain, the disposal of its stake in Intesa Sanpaolo and pensions business in Latin America, which generated capital gains of €1.2bn.
In Spain, the bank issued €7bn of bonds to be converted into Santander shares. Last year, Santander increased its dividend by 25% for the third consecutive year, in line with its policy of 50% payout.
“Santander’s business model, based on retail and commercial banking, continues to show good results through the financial and economic downturn,” says executive vice-president Enrique García Candelas.
“More than four million customers in Spain are benefiting from the ‘We want to be your bank’ plan, which provides zero service charges for linked customers. In Spain, Santander is seen as a strong and sound bank, enabling us to turn adversity into opportunity as our branch network strengthens customer relationships. Santander’s efficiency ratio in Spain is now below 36%, improving 3.7 points from a year earlier. Next year, we will continue to manage costs and spreads to grow in Spain.”
Santander is now the world’s sixth largest bank by market capitalisation and in 2007 it was one of only two of the top 20 European and US banks to achieve positive returns.
