Santander sold €7.5bn of shares last week as the ECB pushed for higher capital levels.
Image: ©Oliver Hoffmann
Shares plummeted in Santander, closing on 8 January at 6.85 and reaching lows of 5.76 on 9 January, a level last seen in September 2013. Monday sees shares standing at 6.00.
After the latest round of stress tests, the European Central Bank not only took over regulation of banks in November 2014 but also decided to set individual targets to raise additional capital so that if a bank failed it would be able to refinance rather than depend on a taxpayer bailout. A report by Berenberg stipulated a shortfall of €230 billion in Eurozone banks, putting pressure on them to increase capital levels.
Santander, Spain’s largest bank and lender denied that the share sale was due to the ECB pressure. Reports say that over half of the 1.214 billion shares at €6.18 each were sold to the U.S. market and a quarter to UK investors. The bank also announced a two-thirds cut in its dividend to €0.20.
Banks with high debt on their balance sheets that may need to act as Santander has are France’s BNP Paribas and Société Générale, Germany’s Deutsche Bank and Commerzbank, and Standard Chartered, Royal Bank of Scotland and Credit Suisse; all assets that may warrant watching over the next month as quarterly earnings appear.
Santander’s end of year earnings will be reported on 3 February 2015.
MT4 chart: Santander
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