The agency also rates the institution’s senior unsecured debt not eligible for MREL at AA-, and its senior unsecured debt eligible for MREL at A+. The short term rating is S-1+, with Stable Outlook

The ratings are driven by the bank’s strong, seasoned business model in retail and commercial banking, which produces a reliable and well-diversified earnings stream and generates capital at group level. Scope believes that this business model has proven its resilience to shocks, having withstood the global financial crisis, the Spanish real estate market collapse, the euro area sovereign crisis and a recent recession in its key market of Brazil without damaging the bank’s capital. Going forward, Santander faces a more challenging outlook in the UK as a result of Brexit-related macro uncertainty, but the outlook for Spain and Brazil is more positive, according to Scope.

Moreover, good credit demand in emerging markets is compensating for the more muted volume-growth outlook in Europe, allowing the group to profitably re-deploy, when needed, capital from cash-generating European operations to fast-growing emerging-market subsidiaries.

Due to the group’s presence in several developed and emerging markets, we believe key ongoing challenges for Santander will be the different regulatory requirements and priorities among the various authorities and ensuring that prudential and supervisory requirements are met not only at the group level but also locally.

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