Breakingviews

EU growth surprises hide clear pattern

By Edward Hadas
May 13, 2015

Recovering Spain was still the GDP star in the first quarter, but traditionally strong Germany did no better than perpetually stagnant Italy, while France defied gloomy predictions and the UK disappointed. Behind the mix-up, the recoveries are real, but mostly slow and unsteady.

Inditex shares no longer a bargain

March 18, 2015

The Zara owner’s stock has risen more than 20 percent this year. The weakening euro is an advantage over rival H&M. The Spanish recovery and the group’s nimble business model justify a premium valuation. But at more than 30 times earnings, the good news is already in the shares.

Santander’s U.S. woes a cautionary M&A tale

March 12, 2015

The Spanish bank’s stateside lender is struggling to pass the Fed’s stress test for the second year in a row. A flawed bank takes time to fix. But Santander let it drag on too long. New bosses should help. The tardy response, though, keeps Santander on the takeover sidelines.

Carlos Slim buys Spanish real estate on the cheap

March 5, 2015

The Mexican tycoon bought a 25 pct stake in property firm Realia at a discount and is eyeing a takeover. He is also the biggest shareholder of builder FCC, which in turn owns major stakes in Realia and Cementos Portland. Slim effectively controls all three. Minorities beware.

Europe’s rebound poses new questions

By Edward Hadas
March 4, 2015

Jobs, growth, morale: the Old Continent is perking up. Policymakers and investors need to adapt. The threat of deflation may recede. Central bank bond-buying may prove unnecessary. And established politicians could regain ground. Yet investors might still cling to bonds.

Santander’s next task: sustainable profit growth

February 3, 2015

After raising capital and trimming the dividend, new boss Ana Botin has proved her leadership credentials. The Spanish bank’s results show provisions and costs down, and net profit up. The real test will be maintaining the momentum even as key economies like Brazil falter.

Rob Cox: Podemos can improve Spanish capitalism

January 29, 2015

After Syriza's victory in Greece, investors are fretting that Spain's "We Can" party could derail reform plans and fiscal discipline. They needn't worry. The Podemos target is the demon of corruption. Even if the movement has already peaked, it has done the country a service.  

Santander finally gets the message on capital

January 8, 2015

The Spanish lender had resisted raising equity. Now new Chair Ana Botin is seeking 7.5 bln euros in a share sale. A 6-8 pct discount may be needed, and there are no pre-emption rights. But the bank gets capital sorted, boosted by a dividend cut, before markets potentially worsen.

Euro zone will flit between crisis and catharsis

December 24, 2014

Elections in Greece or Spain could trigger fresh crises. Populist parties are on the rise, the economy is stalling and governments are paralyzed by their divisions. On the other hand, the euro zone has stronger banks and an activist ECB. There is cause for hope, but it is tiny.

Santander has a 6 bln euro capital opportunity

September 26, 2014

The Spanish bank’s diversification and earnings power are cushions against a shock. But the core capital ratio looks tight. Given Santander’s high valuation, there may not be a better time to boost equity and silence capital sceptics. Raising 6 bln euros would do the trick.