Feb. 20 (Bloomberg) -- Grupo Financiero Santander Mexico SAB, the Mexican unit of Spain’s biggest bank, fell the most on the MSCI Mexico Index after Morgan Stanley cut its rating on the stock, citing disappointing fourth-quarter earnings.
Shares plunged 5.8 percent to 36.19 pesos at the close of Mexico City trading, extending this year’s decline to 13 percent. Today’s drop was the biggest among the 26 members of the MSCI gauge.
Fourth-quarter profit fell 57 percent from a year earlier to 3.31 billion pesos ($259 million), falling short of the average estimate for 4.15 billion pesos among two analysts surveyed by Bloomberg, as provisions for bad loans increased and operating expenses rose, the bank said in a report Feb. 18. Morgan Stanley cut its rating for Santander Mexico’s American depositary receipts from the equivalent of buy to hold, citing an unattractive earnings outlook, according to a report today.
The results were “weak,” UBS strategist Philip Finch wrote in a report dated today. Credit Suisse analysts led by Marcelo Telles called the earnings “disappointing” in a note released Feb. 18.
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