The accounts presented by the Bank yesterday offered no new items of importance to consider, however I will review the following information:
1) The bank continues to generate increased margins on both sides of interests and gross.
2) The benefit is maintained, although in the present circumstances and as you guys know it is a fact that my main focus attention.
3) The credit granted is growing at around 9%, but due to the increase that occurs SPAIN outside.
4) The delinquency rate continues to rise to 3.24% from 2.04% last year. It remains a very fineness ratio.
5) The low coverage rate to 75.3%.
6) Return on equity (ROE) fell significantly from 17% in 2008 to 13.9% in 2009. So does the return on assets becomes yours, 86% from 0.96% the year before.
7) Earnings per share down to 1.05 Euros, ie 14% less than in 2008, undoubtedly as a result of the extension made to strengthen its balance sheet.
Moreover, it is clear that the bank is trying to swim and eat, that is, while it has achieved a significant increase in margins that would have allowed increased coverage of their arrears up to 100%, with positive results but had declined to around the 4500 Mill / Euros. Instead, he has worked to strengthen its capital structure by increasing their capital ratios (Tier and Core Capital) to be able to face difficult times ahead in the coming quarters. The presentation
try to dispel doubts about the possibility of a low level of provisions that the bank has provided, in particular the CEO was devoted to detailing that part of the balance of assets is invested in loans promoter, showing that is very relevant in the case of Santander, while there is no concentration of risk. It is appreciated the effort out of concern that exists, but the risk is not only promoting the credit risk in general and especially in SPAIN, where unemployment situation and the growing suspicion that the delay will continue to increase and that therefore from a position of 100% coverage would have been a very good sign.
To end the question and question ever.
SANTANDER Is A suitable investment options at current prices?.
recall that when analyzing the results of the 1 st half of 2009 and the price got a bit above 10 Euros, my position was clear, he saw no scope for investment at that price. At this time, particularly now the bank has traded below 9 Euros, at that price it is paying more than book value in the vicinity of 1.1 times and if we believe the results and estimate reasonably repeatable in the coming quarters, the PER would be around 8.5.
Keep in mind that the bank's business right now is very diversified and that a rate higher than 70% is obtained outside the country, the question is whether the result in a 9,000-Mill / Euros can be considered appellant over the next years. From a standpoint of ratios, today under 9 euros do not think this expensive, but I think it will be difficult to maintain the result and increase it even more and that is why I believe that there is room for prices slightly higher than the current margin I do not see enough to enter value regardless downs that has been so pronounced in recent weeks may have specific increases that can be exploited in the short term.
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