Banco Santander SWOT & PESTLE Analysis
COMPANY PROFILE -Banco Santander
Business Sector :Banking and Financial Services (BFSI)
Operating Geography :Europe, Spain, Global
About Banco Santander :
Banco Santander, founded in 1856, is a Spanish multinational company, specializing in banking and financial services. The company is headquartered in Santander, Spain. It has consumer finance businesses in European countries, and wholesale and consumer finance business operations in China. It has 482 branches worldwide servicing over 3.34 million individual customers, 288,000 SMEs and 1,300 corporates. Banco Santander has over 202,000 employees globally as of January 2018. Banco Santander features on Euro Stoxx 50 stock market index.Banco Santander, S.A.’s USP or unique selling proposition lies in its maintaining a presence in all global financial centers as the largest Spanish banking institution in the world. As of 2017-18, Santander is the 5th largest bank in Europe with approximately US$1.4 trillion in total assets-under-management. This banking conglomerate is also Spain’s largest bank. Banco Santander’s mission is “to contribute to the progress of people and companies - which means, in large part, recognizing the key role that banks must have to support inclusive growth, the only way to achieve sustainable growth”. Banco Santander’s vision statement reads “Santander is a large international financial group whose primary business is retail banking. Our goal is to offer comprehensive solutions to satisfy the financial needs of our clients and provide excellent value to our shareholders. To achieve this, we are present in ten major markets, where we operate through autonomous subsidiaries (in terms of capital and liquidity) and to whom we provide global business policies and our corporate organizational and technological capacities.” Santander’s purpose statement reads “Our purpose is to help people and businesses prosper”
Banco Santander Revenue :
Net operating income
€25.47 billion - FY ended Dec 31st 2017) (y-o-y Growth 11.9%)
€22.76 billion – FY ended Dec 31st 2016
Competitive Analysis of Banco Santander
| 1. Leading financial holding company 2. Dominance in European and Latin American Market 3. Optimal Service delivery 4. Growing wealth management division Scale and potential for organic growth | 1. Gradual fall down in financial addition 2. Weak performance of Banco Popular 3. Investments in environmentally contentious projects 4. Absence from emerging Asian markets |
| 1. Growth potential through increase in digital footprint 2. Expansion opportunities with growth of SMEs 3. Growing demand for Micro financing 4. Bring the unbanked Latam population in the folds of financial inclusion | 1. Excessive regulatory pressures 2. Competitive environment |
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Detailed SWOT Analysis of Banco Santander
Strength
1. Leading financial holding company: Banco Santander is one of the leading financial holding company with strong financials. The net interest income grew by 10.2%, capital ratios improved and EPS grew by 0.9% in 2017. Its total assets grew by 7.9% to 1,444,305 million euros. Strong financials buttress bank solvency and prevents crash-landing failures in times of economic crisis. It also helps in meeting leverage ratio and cash reserves in adverse scenarios during business cycle fluctuations. The group’s earning has been least volatile over the last 20 years as compared to its peers. The bank has earned credibility and trust which adds more customers and investors & boosts its global value proposition. It helps in expansion and diversification of business to generate more capital.
2. Dominance in European and Latin American Markets: The Company has strong presence in countries like Portugal, Germany, Poland, UK, north-eastern United States, Chile and Puerto Rico. Portugal & Brazil which is evident from the 85% contribution to profits from international operating zones and market leadership among private banks in Spain, Argentina, Portugal and Chile. It is also one of the leading financial companies in Latin America where it won Bank of the year award. This is due their balanced & diversified business in every country which gives long term sustainable results throughout the cycle. The emerging markets provide growth momentum and developed markets provide stability.
3. Innovation and optimal service delivery: Banco Santander have always valued providing best in class services and healthy dealing with customers as its top priority, this in turn is one of the main reason for its success. It has specialized services for clients in 14 countries. Operational efficiency is at the core of the group’s strategies of multi-channeling, deepening digital strategy, strengthening the distribution model and launching new commercial initiatives which decreased cost of credit for the fifth consecutive year by 11 bps. There was a 30% increase in loyalty and 60% less attrition in 2017.
4. Growing wealth management division: The group has integrated its Asset management and private banking businesses for specialization in wealth management in Europe and Americas. It managed assets worth €333 billion in 2017. The personalized services created synergies and also gives it a competitive advantage. This gives a fillip to revenue as the group strengthens its market leadership in core markets. This will also help the group leverage connectivity between the franchises and in building new digital capabilities. Integration increased their loyal customer base by 13% to 17.5 million.
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Weakness
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Opportunity
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Threat
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Major Competitors :
- BNP Paribas
- Banco Bradesco
- Barclays
- Itaú Unibanco Holding
- Lloyds Bank
Recent Acquisition / Mergers / Alliance / Joint Ventures / Divestitures :
Open Table Preview| Banco Popular Español | Banking | 2017 | Acquisition | Bought as part of part of a regulatory rescue package |
| GE Money Bank | GE Capital's consumer finance business | 2014 | Acquisition | Strengthened presence in consumer finance business in Nordics |
| El Corte Inglés | Consumer finance business | 2013 | Acquisition (51% stake) | Strategic stake in financing department of Spain’s biggest department store group |
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Banco Santander SWOT and PESTLE analysis has been conducted by Kanupriya Sheopuri and reviewed by senior analysts from Barakaat Consulting.
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