Announcements

    Drinks

      Scope affirms Banco Santander SA issuer rating at AA-, stable outlook

      SAN 10/31/29 FRN SAN 0.571 05/03/19 FRN SAN 5.780 02/17/28 SAN 4.578 01/31/22 SAN 6.250 Perp '19 FRN SAN 4.000 01/24/20 SAN 6.375 Perp '19 FRN SAN 6.250 Perp '21 MTN SAN 1.400 02/24/27 '22 SAN 0.271 03/04/20 FRN SAN 2.500 03/18/25 SANCPU EUR 15bn ECP SANCPU USD 15bn USCP SAN 5.179 11/19/25 SAN 0.543 12/09/20 MTN SAN 1.375 03/03/21 MTN SAN 0.920 03/11/21 FRN SAN 3.250 04/04/26 SAN 1.710 04/21/31 MTN SAN 0.321 05/06/19 FRN SAN 1.375 02/09/22 SAN 4.250 04/11/27 SAN 6.750 Perp '22 FRN SAN 1.360 04/23/32 SAN 1.482 06/05/24 SAN 1.125 07/20/27 SAN 5.250 Perp '23 FRN SAN 2.084 10/11/29 SAN 0.855 10/13/27 SAN 2.026 10/03/29 SAN 2.000 11/08/29 SAN 3.010 11/17/27 MTN SAN 4.750 Perp '25 FRN SAN 1.450 03/05/27 '22 MTN SAN 1.110 03/18/25 MTN SAN 2.750 08/14/20 '19 MTN SAN 2.200 08/19/19 MTN SAN 2.750 08/31/20 '19 SAN 2.350 09/29/20 '19 MTN SAN 1.980 12/23/30 MTN SAN 2.150 12/29/20 '18 MTN SAN 2.000 02/23/21 '19 MTN SAN 2.000 03/23/21 '19 MTN SAN 2.500 03/30/21 FRN SAN 2.490 04/25/21 FRN SAN 2.677 05/24/21 FRN SAN 1.777 07/08/31 SAN 1.840 07/20/33 MTN SAN 1.750 07/20/31 MTN SAN 1.700 08/16/32 MTN SAN 1.500 09/20/31 MTN SAN 7.500 Perp '24 FRN SAN 2.706 06/27/24 SAN 0.250 06/19/24 SAN 3.306 06/27/29 SAN 0.300 10/04/26 SAN 1.375 07/31/24 MTN SAN 2.100 01/21/31 SAN 2.010 03/07/34 SAN 2.090 02/08/34 SAN 2.100 01/22/31 SAN 0.730 01/28/30 MTN SAN 0.455 11/13/26 MTN SAN 2.011 04/12/39 '29 SAN 0.842 03/27/26 SAN 1.170 02/11/26 SAN 2.280 02/28/39 SAN 1.125 01/17/25 SAN 4.379 04/12/28 SAN 3.800 02/23/28 SAN 2.630 10/24/30 SAN 2.020 12/20/30 SAN 2.280 05/08/31 MTN SAN 3.830 09/22/32 SAN 1.720 06/05/28 SAN 2.750 09/05/37 SAN 2.750 07/04/38 SAN 2.930 09/17/38 SAN 1.015 12/10/27 SAN 3.000 09/28/38 SAN 3.610 03/10/25 MTN SAN 1.440 09/18/24 SAN 2.150 05/30/30 MTN SAN 1.560 10/04/24 SAN 1.600 06/12/32 SAN 3.800 09/11/33 SAN 1.745 09/17/25 SAN 1.000 12/10/24 SAN 0.890 07/11/25 FRN SAN 1.184 05/17/24 FRN SAN 0.814 10/04/38 FRN MTN SAN 1.750 02/17/27 SAN 4.800 07/19/27 SAN 0.207 11/21/24 FRN SAN 0.680 05/11/24 FRN SAN 1.740 06/03/30 MTN SAN 3.490 05/28/30 SAN 2.746 05/28/25 SAN 1.125 06/23/27 MTN SAN 1.375 01/05/26 MTN SAN 0.500 02/04/27 SAN 0.137 01/29/26 FRN MTN SAN 08/12/24 FRN MTN SAN 3.615 04/10/31 SAN 0.463 12/05/24 SAN 0.200 11/19/27 SAN 1.270 09/26/24 FRN SAN 02/11/25 FRN SAN 0.200 02/11/28 MTN
      WEDNESDAY, 10/04/2019 - Scope Ratings GmbH
      Download PDF

      Scope affirms Banco Santander SA issuer rating at AA-, stable outlook

      Following Santander’s Investor day on April 3rd, Scope Ratings has affirmed its long- and short-term ratings on Banco Santander SA. At the same time, it has assigned a BBB- rating to Santander’s USD1.2bn 7.5% AT1 notes issued in February 2019.

      According to Scope, the presented strategy is unlikely to materially change the risk profile of the Santander group, despite the capital reallocation towards emerging markets from developed economies, resulting from faster credit and RWA growth in emerging markets. Scope views positively Santander’s well executed business model in Latin America, a key driver for Santander’s rating. While emerging markets’ profits can be volatile, they have proved crucial in setting Santander apart from domestically-oriented Spanish and other European banks in the past decade.

      At the investor day, Santander also highlighted how focused the group is on digital innovation. The bank budgets EUR 5bn per year in IT spending for the next 4 years, 40% of which on innovation. We regard such managerial focus as positive: while Santander’s business model has weathered the past crisis well, Scope thinks that one main challenges for European banks going forward will be to protect their competitive advantage against rapidly shifting customer behaviour, amidst heightened competition from banks and new competitors such as fin-techs and big-tech companies.

      With a CET1 target range of 11-12% on a fully loaded basis, Santander will likely continue to operate at the lower bound of its European peer group. Given the group’s strong track record of organic capital generation, low earnings volatility, predominance of retail, and relatively high asset-risk intensity, we regard Santander’s capitalization as adequate.

      The return on tangible equity target range of 13-15% is relatively wide, allowing for different scenarios on interest rates. Santander expects to be able to raise profitability in Europe largely by lowering costs while growing in the US and Latin America where interest rates are higher. Scope views an increasing share in these markets as positive.

      Alongside the issuer rating at AA-, the following ratings were affirmed, all with Stable Outlook

      • Senior unsecured debt (preferred, non MREL-eligible) AA-
      • Senior unsecured debt (non preferred, MREL-eligible) A+
      • Tier 2 debt A-
      • AT1 debt BBB-/Stable
      • Short-term debt S-1+

      Among the key rating drivers Scope highlighted: (i) a business model that has withstood crisis challenges: cost-efficient provision of retail and commercial banking services (high pre-provision income buffer to absorb credit charges) and resilient group profitability; (ii) globally diversified revenue and earnings streams with strong market positions in several key markets including Spain, Portugal, Argentina, Brazil, UK, Mexico, Chile, and Poland; (iii) ongoing improvement of capital, liquidity and funding positions in recent years and (iv) European banking union likely to provide a stronger regulatory and supervisory framework.

      According to Scope, Santander’s rating could be downgraded as a consequence of a less favourable operating environment in the UK following Brexit, renewed tension on Spanish bank and Sovereign debt or bank specific event risk, including M&A risk. Conversely, evidence that Santander’s digital investments can drive material business and revenue growth and market share gains would be positive for the rating.

      Scope also assigned a BBB- debt rating to Santander’s USD1.2bn 7.5% AT1 notes issued in February 2019 (XS1951093894), in line with previously rated AT1 bonds by Santander. The bond’s principal loss absorption mechanism is equity conversion with a trigger of 5.125%, applicable both at consolidated and parent company level. 

      Stress testing & cash flow analysis
      No stress testing was performed. No cash flow analysis was performed.

      Methodology
      The methodologies used for this rating(s) and/or rating outlook(s), Bank Rating Methodology and Capital Securities Methodology, are available on www.scoperatings.com.
      Historical default rates of the entities rated by Scope Ratings can be viewed in the rating performance report on https://www.scoperatings.com/#governance-and-policies/regulatory-ESMA. Please also refer to the central platform (CEREP) of the European Securities and Markets Authority (ESMA): http://cerep.esma.europa.eu/cerep-web/statistics/defaults.xhtml. A comprehensive clarification of Scope’s definition of default as well as definitions of rating notations can be found in Scope’s public credit rating methodologies on www.scoperatings.com.
      The rating outlook indicates the most likely direction of the rating if the rating were to change within the next 12 to 18 months.

      Solicitation, key sources and quality of information
      The rating was not requested by the rated entity or its agents. The rated entity and/or its agents participated in the rating process. Scope had access to accounts, management and/or other relevant internal documents for the rated entity or related third party.
      The following substantially material sources of information were used to prepare the credit rating: public domain, the rated entity, third parties and Scope internal sources.
      Scope considers the quality of information available to Scope on the rated entity or instrument to be satisfactory. The information and data supporting Scope’s ratings originate from sources Scope considers to be reliable and accurate. Scope does not, however, independently verify the reliability and accuracy of the information and data.
      Prior to the issuance of the rating or outlook action, the rated entity was given the opportunity to review the rating and/or outlook and the principal grounds on which the credit rating and/or outlook is based. Following that review, the rating was not amended before being issued.

      Regulatory disclosures
      This credit rating and/or rating outlook is issued by Scope Ratings GmbH.
      Lead analyst Marco Troiano, Executive Director
      Person responsible for approval of the rating: Dierk Brandenburg, Managing Director
      The issuer rating was first released by Scope on 02.04.2014. The rating/Outlook was last updated on 08.06.2017.
      The short-term rating/Outlook was first released by Scope on 22.05.2014. The rating/Outlook was last updated on 26.10.2017.
      The senior unsecured debt rating/Outlook was first released by Scope on 02.04.2014. The rating/Outlook was last updated on 25.07.2017.
      The non-preferred senior unsecured debt rating/Outlook was first released by Scope on 25.07.2017.
      The ratings/Outlooks for the Tier 2 securities were first released by Scope on 19.12.2016. The ratings/Outlooks were last updated on 08.06.2017.
      The AT1 ratings/Outlooks were first released by Scope on 09.10.2014. The ratings/Outlooks were last updated on 08.06.2017.

      Potential conflicts
      Please see www.scoperatings.com for a list of potential conflicts of interest related to the issuance of credit ratings.

      Conditions of use / exclusion of liability
      © 2019 Scope SE & Co. KGaA and all its subsidiaries including Scope Ratings GmbH, Scope Analysis GmbH, Scope Investor Services GmbH and Scope Risk Solutions GmbH (collectively, Scope). All rights reserved. The information and data supporting Scope’s ratings, rating reports, rating opinions and related research and credit opinions originate from sources Scope considers to be reliable and accurate. Scope does not, however, independently verify the reliability and accuracy of the information and data. Scope’s ratings, rating reports, rating opinions, or related research and credit opinions are provided ‘as is’ without any representation or warranty of any kind. In no circumstance shall Scope or its directors, officers, employees and other representatives be liable to any party for any direct, indirect, incidental or other damages, expenses of any kind, or losses arising from any use of Scope’s ratings, rating reports, rating opinions, related research or credit opinions. Ratings and other related credit opinions issued by Scope are, and have to be viewed by any party as, opinions on relative credit risk and not a statement of fact or recommendation to purchase, hold or sell securities. Past performance does not necessarily predict future results. Any report issued by Scope is not a prospectus or similar document related to a debt security or issuing entity. Scope issues credit ratings and related research and opinions with the understanding and expectation that parties using them will assess independently the suitability of each security for investment or transaction purposes. Scope’s credit ratings address relative credit risk, they do not address other risks such as market, liquidity, legal, or volatility. The information and data included herein is protected by copyright and other laws. To reproduce, transmit, transfer, disseminate, translate, resell, or store for subsequent use for any such purpose the information and data contained herein, contact Scope Ratings GmbH at Lennéstraße 5 D-10785 Berlin.

      Scope Ratings GmbH, Lennéstraße 5, 10785 Berlin, District Court for Berlin (Charlottenburg) HRB 192993 B, Managing Directors: Torsten Hinrichs and Guillaume Jolivet.

      SAN 10/31/29 FRN SAN 0.571 05/03/19 FRN SAN 5.780 02/17/28 SAN 4.578 01/31/22 SAN 6.250 Perp '19 FRN SAN 4.000 01/24/20 SAN 6.375 Perp '19 FRN SAN 6.250 Perp '21 MTN SAN 1.400 02/24/27 '22 SAN 0.271 03/04/20 FRN SAN 2.500 03/18/25 SANCPU EUR 15bn ECP SANCPU USD 15bn USCP SAN 5.179 11/19/25 SAN 0.543 12/09/20 MTN SAN 1.375 03/03/21 MTN SAN 0.920 03/11/21 FRN SAN 3.250 04/04/26 SAN 1.710 04/21/31 MTN SAN 0.321 05/06/19 FRN SAN 1.375 02/09/22 SAN 4.250 04/11/27 SAN 6.750 Perp '22 FRN SAN 1.360 04/23/32 SAN 1.482 06/05/24 SAN 1.125 07/20/27 SAN 5.250 Perp '23 FRN SAN 2.084 10/11/29 SAN 0.855 10/13/27 SAN 2.026 10/03/29 SAN 2.000 11/08/29 SAN 3.010 11/17/27 MTN SAN 4.750 Perp '25 FRN SAN 1.450 03/05/27 '22 MTN SAN 1.110 03/18/25 MTN SAN 2.750 08/14/20 '19 MTN SAN 2.200 08/19/19 MTN SAN 2.750 08/31/20 '19 SAN 2.350 09/29/20 '19 MTN SAN 1.980 12/23/30 MTN SAN 2.150 12/29/20 '18 MTN SAN 2.000 02/23/21 '19 MTN SAN 2.000 03/23/21 '19 MTN SAN 2.500 03/30/21 FRN SAN 2.490 04/25/21 FRN SAN 2.677 05/24/21 FRN SAN 1.777 07/08/31 SAN 1.840 07/20/33 MTN SAN 1.750 07/20/31 MTN SAN 1.700 08/16/32 MTN SAN 1.500 09/20/31 MTN SAN 7.500 Perp '24 FRN SAN 2.706 06/27/24 SAN 0.250 06/19/24 SAN 3.306 06/27/29 SAN 0.300 10/04/26 SAN 1.375 07/31/24 MTN SAN 2.100 01/21/31 SAN 2.010 03/07/34 SAN 2.090 02/08/34 SAN 2.100 01/22/31 SAN 0.730 01/28/30 MTN SAN 0.455 11/13/26 MTN SAN 2.011 04/12/39 '29 SAN 0.842 03/27/26 SAN 1.170 02/11/26 SAN 2.280 02/28/39 SAN 1.125 01/17/25 SAN 4.379 04/12/28 SAN 3.800 02/23/28 SAN 2.630 10/24/30 SAN 2.020 12/20/30 SAN 2.280 05/08/31 MTN SAN 3.830 09/22/32 SAN 1.720 06/05/28 SAN 2.750 09/05/37 SAN 2.750 07/04/38 SAN 2.930 09/17/38 SAN 1.015 12/10/27 SAN 3.000 09/28/38 SAN 3.610 03/10/25 MTN SAN 1.440 09/18/24 SAN 2.150 05/30/30 MTN SAN 1.560 10/04/24 SAN 1.600 06/12/32 SAN 3.800 09/11/33 SAN 1.745 09/17/25 SAN 1.000 12/10/24 SAN 0.890 07/11/25 FRN SAN 1.184 05/17/24 FRN SAN 0.814 10/04/38 FRN MTN SAN 1.750 02/17/27 SAN 4.800 07/19/27 SAN 0.207 11/21/24 FRN SAN 0.680 05/11/24 FRN SAN 1.740 06/03/30 MTN SAN 3.490 05/28/30 SAN 2.746 05/28/25 SAN 1.125 06/23/27 MTN SAN 1.375 01/05/26 MTN SAN 0.500 02/04/27 SAN 0.137 01/29/26 FRN MTN SAN 08/12/24 FRN MTN SAN 3.615 04/10/31 SAN 0.463 12/05/24 SAN 0.200 11/19/27 SAN 1.270 09/26/24 FRN SAN 02/11/25 FRN SAN 0.200 02/11/28 MTN

      Related news

      Show all
      Webinar: French banks head into a more volatile business environment

      15/4/2024 Research

      Webinar: French banks head into a more volatile business ...

      Real Estate Insight - April 2024

      12/4/2024 Research

      Real Estate Insight - April 2024

      French banks quarterly: Heading into a more volatile business environment

      11/4/2024 Research

      French banks quarterly: Heading into a more volatile business ...

      Updated issuer rating report on Sandnes Sparebank

      2/4/2024 Monitoring note

      Updated issuer rating report on Sandnes Sparebank

      Webinar: Commercial real estate – how concerned should debt investors be?

      26/3/2024 Research

      Webinar: Commercial real estate – how concerned should debt ...

      German savings and co-operative banks well positioned to face challenges

      26/3/2024 Research

      German savings and co-operative banks well positioned to face ...