Banco Santander SA

BNC: XLON (GBR)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	GBX 676.00	Qzyvxh	Cvm

Santander Capital Allocation Rating: Standard

Johann Scholtz

Sep 21, 2021

We give Santander a Standard capital allocation rating. We do not believe that Santander has any competitive advantages in its U.S. retail banking operation or in its U.K. retail banking business. Both businesses also earn returns materially below their cost of capital. Santander, however, views these businesses as core to its operations. We believe Santander should exit these businesses. It could potentially free up capital to strengthen Santander’s weak balance sheet. In our view, Santander’s shareholder distribution policy is appropriate. We maintain our narrow economic moat rating and our EUR 4 per share fair value estimate.

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