- This topic has 20 replies, 13 voices, and was last updated 15 years, 10 months ago by
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After finishing HBOS, RBS and Bradford&Bingley, the vultures are now prepared to attack the Spanish banks.
I guess next few weeks will be difficult for banks in Spain.
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bank ‘health’ (or capitalisation) is a ratio of savings to loans. An ideal situation is that the ratio of savings to loans is 1 ie the bank has the same amount in cash as it is owed by the lenders. HSBC I believe has a ratio of savings:loans of 0.8.
On sky news they were saying that many spanish banks have 5 times the amount of loans to savings. So if just 20% of the lenders default, the bank runs out of cash and would need a government bail out to avoid collapse. Sky reckoned that the spanish banks are in the most perilous position in europe due to the vast amounts that they had loaned to developers and house buyers during europes biggest ever housing boom to bust. So far the spanish bankers have kept a low profile, but the collapse of some major banks was ‘inevitable’ as they can’t hide their liquidity problems forever.
Basically, they are saying that the problems that spanish banks are hiding are far worse that with the US, UK or anyone else. The question is how will the spanish government afford a bail out as they are one of europes less wealthy states. Worst case is that a major bank goes down and takes all the savings with it.
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…and yet it’s still on the acquisition trail…
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@sdodgson wrote:
…and yet it’s still on the acquisition trail…
Yeah, but paying for it in shares, not laying down cash.
Santander of Spain said it will acquire the remaining stake of Sovereign Bancorp it does not own for $1.9 billion in stock
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While I don’t have loan to deposit ratios of Spanish Banks or other banks.
It, is my understanding that it is the CAJA’s i.e. local/regional savings banks that are exposed to the construction sector and not your normal banks as we know them.
Who will rescue them ???? I am surprised that this question is being raised. It will be the European central Banks or looking at another way EU.
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flosmichael wrote:After finishing HBOS, RBS and Bradford&Bingley, the vultures are now prepared to attack the Spanish banks.
I guess next few weeks will be difficult for banks in Spain.
Looks as if the vultures are in for a good feed, Spanish bank prices today 22/10/08
Quote Fall%
BA.POPULAR 7,00 -8,02
BA.SABADELL 5,17 -2,08
BA.SANTANDER 8,27 -10,88
BANESTO 9,89 -4,44
BANKINTER 8,79 -2,87
BBVA 9,04 -9,89LOOKS LIKE SPAIN IS THE NEXT MARKET TO BE SOLD SHORT.
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135yearswaiting wrote:flosmichael wrote:After finishing HBOS, RBS and Bradford&Bingley, the vultures are now prepared to attack the Spanish banks.
I guess next few weeks will be difficult for banks in Spain.
Looks as if the vultures are in for a good feed, Spanish bank prices today 22/10/08
Quote Fall%
BA.POPULAR 7,00 -8,02
BA.SABADELL 5,17 -2,08
BA.SANTANDER 8,27 -10,88
BANESTO 9,89 -4,44
BANKINTER 8,79 -2,87
BBVA 9,04 -9,89LOOKS LIKE SPAIN IS THE NEXT MARKET TO BE SOLD SHORT.
Have just been informed by a Spaniard that todays big fall on the Madrid market is the fault of the Argentinians they are plannintg to nationalise pension funds there, as Spain is a big investor in Argentina down goes the market.
Not sure if the Argentinians are to blame or not but it makes a change from Northern Europeans and the USA being blamed.
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135yearswaiting wrote:135yearswaiting wrote:flosmichael wrote:After finishing HBOS, RBS and Bradford&Bingley, the vultures are now prepared to attack the Spanish banks.
I guess next few weeks will be difficult for banks in Spain.
Looks as if the vultures are in for a good feed, Spanish bank prices today 22/10/08
Quote Fall%
BA.POPULAR 7,00 -8,02
BA.SABADELL 5,17 -2,08
BA.SANTANDER 8,27 -10,88
BANESTO 9,89 -4,44
BANKINTER 8,79 -2,87
BBVA 9,04 -9,89LOOKS LIKE SPAIN IS THE NEXT MARKET TO BE SOLD SHORT.
Have just been informed by a Spaniard that todays big fall on the Madrid market is the fault of the Argentinians they are plannintg to nationalise pension funds there, as Spain is a big investor in Argentina down goes the market.
Not sure if the Argentinians are to blame or not but it makes a change from Northern Europeans and the USA being blamed.
Article in the Telegraph proves what my Spanish friend said about Argentina, the Stock Market there fell 11% and shares in the telephone company was in free fall.
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Get your money out Mark and put it under the mattress. 🙄
Santander is under pressure according to the Telegraph today, as investors feel they will be sucked into the financial maelstrom.
Ratings agencies warn that Santander will be hit if Latin America deteriorated. Santander has significant exposure to Brazil, Mexico and Chile. Latin America has become a net negative.
Hedge Funds are shorting Santander’s shares.
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Imagine Maximus, the fame that would come from being responsible for a Run on a Bank (like Santander), could be cool, a bit Nick Leeson-ish at Barings 8) You’d be all over the papers 😉
Joking apart though, I personally think Santander have, and still are taking on far too much with aquisitions in the UK and elsewhere, apart from their heavy exposure to Spanish construction and now all this Latin America talk. All the UK sub-prime mortgages will be making headlines soon that they now own too.
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This link will get you to the current positions of Spain’s banks on the Madrid Bolsa. 29th October 2008
http://www.bolsamadrid.es/ing/contenido.asp?menu=3&enlace=/ing/mercados/acciones/accind1_1.htm
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I always thought Spanish banks were in somewhat better shape than their UK counterparts because of their careful attitude to lending.
Whereas in the UK any tom, dick or harry used to be able to get a credit card or loan, here it was not the case.
Does this basic commonsense approach not mean that the Spanish banks have healthier spreadsheets?
Or am I just showing my ignorance of economics?
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Spanish banks should be healthy how high their charges are. Annual charge for two debit cards for a Spanish joint account 14E each.
What Spain is good at is spinning and lying. The UK shoots itself in the foot all the time, The Governer of the Bank of England seems to come out with some bad predictions almost daily. Whilst Spain says everything is hunky Dory and the economy is strong. Brussels frequently asks Spain to revise it’s figures. I bet the recent figure of 0.2% growth (Spain) was a massaged figure to prevent official recession figures.
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As some of us have said before, Santander are on the slippery slope. According to yesterday’s Telegraph, Santander are seeking a 7 billion euro rights issue having previously said they didn’t need new funds.
Their aquisitions of various UK and other Banks etc is now coming home to roost with loads of bad sub prime debts and costs, plus their exposure to Latin America is about to backfire on them, and last but not least they are heavily exposed to the failing Spanish construction industry.
They could be in the poo next year.
Grab your money and run 😕
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