James Moore: Santander looks like it's catching a very nasty cold from the Spanish flu


Outlook Have the wheels fallen off Banco Santander? This is the bank, remember, that incredibly brushed off the credit crunch as if it were an elephant having a minor problem with an irritating mosquito.

The bank actually emerged from the disaster of the three-pronged takeover and break-up of a Dutch disaster zone (ABN Amro) looking better than it did when it went in, thanks to skilfully allowing the hubris-fuelled Sir Fred Goodwin to do all the hard work while it waltzed off with all the good bits. Some of which were later (part) sold at a healthy profit.

Incredibly this is a bank that even had the rambunctious members of the last Treasury Select Committee purring like well-fed moggies. That was accomplished by playing the ever so 'umble Uriah Heep card, showing a bit of humility (yes, you British banks, it is possible) and preaching the MPs' "narrow banking is the way forward" mantra back to them.

In short, while its rivals were filling their boots with taxpayer-funded bonuses, and cocking snooks at their rescuers, the boys from Banco looked good. A bit too good, if truth be told, and if it looks too good to be true in banking, well...

Was yesterday's profit warning the first sign of reality biting, then? For a long time there has been a small but determined band of Santander sceptics in the City, people who doubt its apparent ability to walk on water.

Take Joseph Dickerson of Execution Noble, for example. He took issue with the Bank of Spain's assertion that Santander and BBVA were "the strongest [banks] in Europe", suggesting they needed £9bn back in June. He highlighted the small matter of sharply rising unemployment, deflationary pressures and a property bust. That's one example, but there have been others. These people looked at Santander's supernova-like numbers and wondered how the bank appeared able to defy gravity. After all, even the mighty HSBC hasn't escaped the events of the last few years unscathed.

There have been some ugly, ugly things happening in Banco's home market. Santander might be a global bank, but surely it can't entirely escape the crisis in its back yard. Can it?

Well, no. Yesterday the bank called a halt to acquisitions, provisionally scheduled a partial float of its UK arm for next year, and admitted that 2010 profits would not meet its forecasts.

The latter was not least because Santander had to take a rather bigger-than-expected charge for bad Spanish assets under the Bank of Spain's accounting rules. The Banco boys caught short by the Spanish practices of the regulator? Surely not.

What is clear about Santander now is that the takeover spree that turned it into a global bank is well and truly over. If there are deals to be done over the next couple of years they are likely to be disposals, or partial disposals like the flotation of the UK arm next year. The MPs on that committee might like to think carefully in future about putting too much credence in the honeyed words of bankers who set out to tell you want you want to hear.

Is the profit warning a bump in the road, or something more serious? Hard to say right now. But the old market mantra is that one such warning is usually followed, sooner or later, by another. And then another. Trouble comes in threes. Don't fear though, Santander's a really, really big bank. Too big in fact to... but we won't go there.

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
Wolf (Nathan McMullen), Ian (Dan Starky), The Doctor (Peter Capaldi), Clara (Jenna Coleman), Santa Claus (Nick Frost) in the Doctor Who Christmas Special (BBC/Photographer: David Venni)
tvOur review of the Doctor Who Christmas Special
News
peopleIt seems you can't silence Katie Hopkins, even on Christmas Day...
Arts and Entertainment
Left to right: Stanley Tucci, Sophie Grabol and Christopher Eccleston in ‘Fortitude’
tvSo Sky Atlantic arrived in Iceland to film their new and supposedly snow-bound series 'Fortitude'...
Arts and Entertainment
Kellie Bright as Linda Carter and Danny Dyer as Mick Carter

EastEnders Christmas specials are known for their shouty, over-the-top soap drama but tonight the show has done itself proud thanks to Danny Dyer.

PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Arts and Entertainment
Call The Midwife: Miranda Hart as Chummy
tvCall the Midwife Christmas Special
Sport
Laura Trott and Jason Kenny are preparing for the Commonwealth Games in Glasgow
sport
Arts and Entertainment
Sir Bruce Forsyth with Tess Daly in the BBC's Strictly Come Dancing Christmas Special
tvLouis Smith wins with 'Jingle Bells' quickstep on Strictly Come Dancing's Christmas Special
News
news
Arts and Entertainment
tv
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

The Jenrick Group: Night Shift Operations Manager

£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

SThree: Trainee Recruitment Consultant - LONDON

£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

Day In a Page

Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all
The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there