Today's Technical View on Grupo Financiero Santander and Banco Santander:
Outlook for Foreign Regional Banks
LONDON, February 22, 2013
LONDON, February 22, 2013 /PRNewswire/ --
Banks across the world are facing stricter regulatory environment. Although
banks earlier this year got a relief after the Basel liquidity rule was
loosened, they are still under pressure to strengthen their balance sheets.
Meanwhile, low interest rate environment in most of the developed world is
another major challenge facing the banking industry. However, foreign regional
banks such as Grupo Financiero Santander Mexico SAB de CV (NYSE: BSMX) and
Banco Santander SA (NYSE: BSBR), which operate in emerging markets of Mexico
and Brazil, respectively, are in a relatively better position compared to
other foreign banks, especially the ones in Europe. StockCall initiated free
in-depth technical analysis on Grupo Financiero Santander and Banco Santander
which are currently available upon sign up at
Low Interest Rate Environment in Developed Countries
Banks in the developed world are operating in a low interest rate. From the
Federal Reserve in the U.S., to the Bank of Japan, central banks across the
developed world have implemented ultra-loose monetary policy in order to boost
economic growth. While a low interest rate environment is beneficial to the
economy, for banks it means low interest income.
One benefit of the record low interest environment for banks is that it has
led to an increase in lending activity.
Banks Operating in Emerging Markets in a Better Position
While banks in the developed world are operating in a challenging environment,
banks operating in emerging markets are in a better position due to relatively
higher interest rates. While most developed economies are fighting slow growth
and inflation, for emerging economies the biggest concern is high inflation.
As a result, interest rates in most of these economies are expected to remain
relatively high, boosting banks' interest income.
In Mexico, the country's central bank has kept the benchmark interest rate at
4.50% for a while now. Just last week, Agustin Carstens, Mexico's central bank
governor, said that the inflation trend must consolidate before the central
bank will slash interest rates.
In Brazil, the country's central bank kept the benchmark interest rate
unchanged at 7.25% when it last met in January.
Post-financial crisis of 2009, regulators across the world have been looking
at ways to make the banking sector more robust. However, some of the measures
that regulators have been planning to implement have been criticized by banks.
One of the measures that came under criticism was the liquidity coverage ratio
(LCR). Last month, though, banks won a 4-year delay to fully implement LCR.
Grupo Financiero Santander Mexico SAB de CV Reports Q4 Results
Earlier this week, Grupo Financiero Santander Mexico SAB de CV reported its
financial results for the fourth quarter ended December 31, 2012. The bank's
comparable net income for the fourth quarter rose 16% on a year-over-year
basis. Sign up for the free technical analysis on Grupo Financiero Santander
S.A.B. de C.V. at
Chairman and CEO Marcos Martinez said that the bank reported a solid operating
performance in the fourth quarter, balancing robust growth with strong asset
quality and operational efficiency.
Banco Santander's Q4 Results Beat Estimates
Last month, Banco Santander (Brasil) SA reported better-than-expected fourth
quarter profit, driven by an aggressive cut in bad-loan provisions. The bank
reported fourth quarter net income of R$1.598 billion ($803 million). Download
the free report on Banco Santander (Brasil) S.A. by registering at
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