12. Apr 2017 Monitoring note  – Banks

New analysis on Santander

Scope Ratings has updated its rating report on Banco Santander SA, rated AA- with Stable Outlook.

On 2 February 2017, Scope Ratings upgraded the Issuer Credit-Strength Rating (ICSR) of Banco Santander SA to AA- from A+, maintaining the Stable Outlook. The rating upgrade was related to forthcoming adjustments in creditor hierarchy related to the introductions of MREL-eligible debt and are in line with the most current version of Scope’s bank rating methodology (May 2016). The short-term rating is S-1, with Stable Outlook

The ratings are driven by the bank’s strong and seasoned retail and commercial banking business model, which produces a reliable and well-diversified earnings stream and generates capital at the group level. Having withstood the global financial crisis, the Spanish real estate market collapse, and the euro area sovereign crisis without damage to capital, Scope believes that the business model of Santander has proven its resilience to shocks.

Good credit demand in emerging markets is making up for the more muted volume-growth outlook in Europe, allowing the group to deploy capital profitably in markets it knows well. Stable profit is flowing from the more developed markets, helping to smooth out emerging markets’ higher macro volatility. To some extent, this is the reverse of the situation during the crisis years, when the more robust emerging-market earnings were compensating for developed-market troubles.

Download the updated rating report.


Scope Ratings AG    Phone: +49 30 27891-0
Marco Troiano    m.troiano@scoperatings.com
Samuel Theodore    s.theodore@scoperatings.com
Oliver Müller    press@scopegroup.com

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