Banco Santander’s headquarters are in Europe, but the centre of gravity of its operations has been drifting westward to Latin America for many years now. Over the review period, the bank posted a solid year of progress among many of its Latin American markets, which comprise Brazil, Mexico, Chile, Argentina, Uruguay, Colombia and Peru.
Surprisingly, given the importance to the franchise and its recent strong performance, Santander’s bank in Brazil underperformed. Santander Brasil was more aggressive than the market in terms of recognizing asset-quality deterioration and this has dragged on its recent performance.
But Santander, led in the region by Carlos Rey, regional head for south America, remains well run and profitable, and it is seeking to expand into new products and credit segments. Its bet on agriculture looks well made, given the recent outperformance of the sector, and the fundamentals of the business should see the bank’s profitability return to industry benchmarks over the coming year.
Brazil’s