Banco Santander is one of the most important financial institutions and this week has presented information in order to achieve the review of the Strategic Plan 2015-2018, this is a plan that focuses on recovering profitability.
The most remarkable of it is the upward revision of the Return on Tangible Equity (ROTE) objective for 2018, raising it from 11% to over 11.5%, supported by the improved economic outlook in a significant part of its main markets. Likewise, the financial institution has kept the other objectives set for 2018.
The Strategic Plan is based on commercial transformation in order to increase revenue growth, gaining market share while increasing commission income and focusing primarily on reducing the cost base, avoiding duplication, promoting operational excellence and reducing the costs of credit risk.
During the presentation, Banco Santander reiterates that the current macroeconomic scenario favors activity, both in developed markets, where there is also an acceleration of the cycle and the beginning of the process to normalize the currency, with the prospect of progressive increases in rates, such as in the emerging, robust growth.
The entity counts its sensitivity to interest rates in the United States and Europe, saying that more than 100 basis points in Europe and the US would represent an annual increase of 1.4 billion euros, 3% of the estimated income for 2017.
Expert analysts have considered that the objectives are achievable, this may not imply large variations from what has been discounted by the market since the impact of the quotations should be a little more limited.
In addition, the same experts believe it is very positive that the path remains open to improve future objectives, but these should always go hand in hand with an upward revision of the synergies that are estimated in the integration of Popular, as these are placed well above what was planned at the beginning.
On the other hand, Bankinter experts believe that the basic conditions are very strong for SAN to meet all the financial objectives that have been proposed. The improvement of the indicators in the main countries in which they are present, as well as the evolution of the types and the efforts in its management, point out to a substantial improvement in the P & G account.
Also, they say it is possible to positively value the evolution of main management metrics, ordinary result, credit quality and solution, and the diversification of the bank’s income, the developed economies generate 52% of the attributable net benefit and emergent 48%.
Finally, the market reacts with purchases to the news and pushes a 1.6% of the titles of Banco Santander, up to 5.699 euros, in a session of rising tendency for the selective Ibex 35. In the last month, Santander revalues were a little higher than a 1.5%.