If you are looking for companies that have yet to write down massive amounts of losses in this global credit meltdown, look no further than Banco Santander. The Spanish Bank holds a major position in the Spanish mortgage and construction boom. The Spanish property market is heading south quickly and I fully anticipate losses to build there soon. In addition, it acquired Abbey National in the UK in 2004. The UK is another market that should be hard hit as the credit meltdown spreads from U.S. subprime.
Bloomberg had an article just yesterday about Santander and how it has deftly avoided the writedown dilemmas of many other major global banks. Read this article entitled “Santander Shuns Subprime as Botin Defers Anointing a Successor” to get a balanced view of Santander’s future prospects.
I, nevertheless, feel that Santander will show greater exposure once the credit losses spread beyong U.S. subprime. As with HBOS, the UK’s largest mortgage lender, I fully anticipate that their moment in the sun is yet to come.
UPDATE: Santander has released earnings. They were good. But the Bloomberg article notes the potential for future writedowns saying:
“Though Santander avoided the U.S. subprime-related investments that led to first-quarter losses at UBS AG and Deutsche Bank AG, it earns about half its profit in Spain and the U.K., two countries hurt by slumping economic growth.”
See: Credit Crisis Timeline for a full list of writedowns by institution and a timeline of the credit crunch.