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
ebooks
ebooksA special investigation by Andy McSmith
Arts and Entertainment
Attenborough with the primates
tvWhy BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter
News
Kelly Osbourne will play a flight attendant in Sharknado 2
people
News
A bartender serves beers
news
Arts and Entertainment
Daniel Craig and Rory Kinnear film Spectre in London
film
Life and Style
The finale at Dolce and Gabbana autumn/winter 2015
fashion
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

SThree: HR Benefits Manager

£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

Recruitment Genius: Office Manager / Financial Services

£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...

Jemma Gent: Year End Accountant

£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...

Jemma Gent: Management Accountant

£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...

Day In a Page

The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn
Yvette Cooper: We can't lose the election. There's too much on the line

Yvette Cooper: We can't lose the election. There's too much on the line

The shadow Home Secretary on fighting radical Islam, protecting children, and why anyone in Labour who's thinking beyond May must 'sort themselves out'
A bad week for the Greens: Leader Natalie Bennett's 'car crash' radio interview is followed by Brighton council's failure to set a budget due to infighting

It's not easy being Green

After a bad week in which its leader had a public meltdown and its only city council couldn't agree on a budget vote, what next for the alternative party? It's over to Caroline Lucas to find out
Gorillas nearly missed: BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter

Gorillas nearly missed

BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter
Downton Abbey effect sees impoverished Italian nobles inspired to open their doors to paying guests for up to €650 a night

The Downton Abbey effect

Impoverished Italian nobles are opening their doors to paying guests, inspired by the TV drama
China's wild panda numbers have increased by 17% since 2003, new census reveals

China's wild panda numbers on the up

New census reveals 17% since 2003
Barbara Woodward: Britain's first female ambassador to China intends to forge strong links with the growing economic superpower

Our woman in Beijing builds a new relationship

Britain's first female ambassador to China intends to forge strong links with growing economic power
Courage is rare. True humility is even rarer. But the only British soldier to be awarded the Victoria Cross in Afghanistan has both

Courage is rare. True humility is even rarer

Beware of imitations, but the words of the soldier awarded the Victoria Cross were the real thing, says DJ Taylor
Alexander McQueen: The catwalk was a stage for the designer's astonishing and troubling vision

Alexander McQueen's astonishing vision

Ahead of a major retrospective, Alexander Fury talks to the collaborators who helped create the late designer's notorious spectacle
New BBC series savours half a century of food in Britain, from Vesta curries to nouvelle cuisine

Dinner through the decades

A new BBC series challenged Brandon Robshaw and his family to eat their way from the 1950s to the 1990s
Philippa Perry interview: The psychotherapist on McDonald's, fancy specs and meeting Grayson Perry on an evening course

Philippa Perry interview

The psychotherapist on McDonald's, fancy specs and meeting Grayson Perry on an evening course
Bill Granger recipes: Our chef recreates the exoticism of the Indonesian stir-fry

Bill Granger's Indonesian stir-fry recipes

Our chef was inspired by the south-east Asian cuisine he encountered as a teenager
Chelsea vs Tottenham: Harry Kane was at Wembley to see Spurs beat the Blues and win the Capital One Cup - now he's their great hope

Harry Kane interview

The striker was at Wembley to see Spurs beat the Blues and win the Capital One Cup - now he's their great hope
The Last Word: For the good of the game: why on earth don’t we leave Fifa?

Michael Calvin's Last Word

For the good of the game: why on earth don’t we leave Fifa?