We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
SAN's Business Restructuring Initiatives Driving Growth: Time to Buy?
Read MoreHide Full Article
One of the largest Spanish lenders, Banco Santander, S.A. (SAN - Free Report) , is undertaking several steps to streamline operations and pivot toward high-growth markets in Europe and the Americas. In sync with this, on May 5, the company announced the sale of approximately 49% stake in its Polish banking business, Santander Bank Polska S.A., to Austrian bank Erste Group for €6.8 billion ($7.7 billion).
In addition, Erste Group will acquire 50% of Santander Polska’s asset management business (TFI), which is not currently owned by the bank, for €0.2 billion. This brings the total consideration to €7 billion. The transaction, expected to close by the year-end, is projected to result in a €2 billion net capital gain for SAN.
Following the completion, Banco Santander will retain around 13% of Santander Polska and intends to fully acquire Santander Consumer Bank Polska by purchasing the remaining 60% stake from Santander Polska before closing.
Upon closure, SAN will temporarily operate with a CET1 ratio above its 12–13% target, with plans to return to this range by strategically deploying capital to drive profitable organic growth and investments that enhance earnings, returns and shareholder value. The bank will distribute 50% of the capital released—around €3.2 billion—via share buybacks, accelerating progress toward its €10 billion buyback target for 2025–2026.
Further, the transaction is expected to be accretive to SAN’s earnings by 2027-2028, with re-deployed capital supporting further growth through share buybacks, organic expansion and strategic acquisitions. This will enhance its flexibility to invest across existing markets in Europe and the Americas.
Financial Impact of the Transaction
Image Source: Banco Santander, S.A.
Since the announcement of the above-mentioned transaction, shares of Banco Santander have risen 3.6% on the NYSE.
Other Factors to Consider for Banco Santander
Expansion of Digital Bank: Per a recent filing with the Office of the Comptroller of the Currency, Banco Santander plans to close approximately 20 U.S. branches—around 5% of its U.S. retail network—by August, as part of its strategy to streamline operations and respond to the growing shift toward digital banking. This move aligns with the rapid growth of its U.S.-based digital platform, Openbank, which has already surpassed $2 billion in deposits since its launch in October 2024.
Originally relaunched in 2017, Openbank has grown to become Europe’s largest fully digital bank by deposit volume, operating across Spain, Germany, Portugal, the Netherlands, the United States and Mexico. Representing SAN’s broader commitment to innovation, Openbank leverages advanced technologies such as AI-powered financial tools and a Roboadvisor platform, offering customers a seamless and intelligent approach to saving and investing.
One Transformation Program: Launched in 2014, the One Transformation program focuses on digital transformation, operational efficiency and customer experience. As such, SAN created a common operating and business model for Retail and Commercial Banking segments, which continues to boost productivity, cut service costs and empower it to improve customer experience.
Driven by the One Transformation program, Banco Santander kicked off 2025 in a strong fashion, with its first-quarter 2025 net profit of €3.4 billion marking a fourth straight quarterly record. The company posted 19% year-over-year growth in net profit on revenues of €15.5 billion, which rose 5% in constant currency terms.
One Transformation Execution
Image Source: Banco Santander, S.A.
Additionally, SAN is on track to achieve its 2025 targets, including almost €62 billion of revenue and mid-high single-digit growth in net fee income in constant euros.
2025 Targets
Image Source: Banco Santander, S.A.
Analyst Sentiments Bullish for SAN
The Zacks Consensus Estimate for Banco Santander’s 2025 revenues suggests a 3.6% decline on a year-over-year basis because of a challenging operating backdrop. On the other hand, 2026 revenues are expected to grow 3.4%.
Further, the consensus estimate for earnings indicates a 12.1% and 12.2% increase for 2025 and 2026, respectively. Earnings estimates for both years have been revised upward over the past 30 days.
Banco Santander’s shares have performed extremely well on the bourses this year. The stock has soared 62.3% so far this year compared with the industry’s rally of 16.1%. Also, it has outperformed its peers, Barclays (BCS - Free Report) and HSBC Holdings (HSBC - Free Report) , in the same time frame.
SAN YTD Price Performance
Image Source: Zacks Investment Research
Now, let’s take a look at the value SAN offers investors at current levels.
At present, Banco Santander is trading at 1.25X 12-month trailing price/tangible book (P/TB), below its five-year median of 0.71X. Meanwhile, the industry has P/TB TTM of 2.18X. Hence, the stock looks inexpensive compared with the industry average.
SAN P/TB TTM
Image Source: Zacks Investment Research
Further, Barclays has a P/TB TTM of 0.70X and HSBC’s P/TB TTM is 1.02X. So, Banco Santander is trading at a premium compared with Barclays and HSBC.
How to Play Banco Santander Stock Now
SAN’s efforts to restructure its business to improve operating efficiency through the One Transformation program and digital expansion plan are projected to drive growth. Yet, a tough operating backdrop because of global macroeconomic headwinds and not-so-impressive loan demand is likely to act as a spoilsport to some extent.
Nonetheless, bullish analyst sentiments and inexpensive valuation make Banco Santander stock a lucrative bet for investors.
Image: Bigstock
SAN's Business Restructuring Initiatives Driving Growth: Time to Buy?
One of the largest Spanish lenders, Banco Santander, S.A. (SAN - Free Report) , is undertaking several steps to streamline operations and pivot toward high-growth markets in Europe and the Americas. In sync with this, on May 5, the company announced the sale of approximately 49% stake in its Polish banking business, Santander Bank Polska S.A., to Austrian bank Erste Group for €6.8 billion ($7.7 billion).
In addition, Erste Group will acquire 50% of Santander Polska’s asset management business (TFI), which is not currently owned by the bank, for €0.2 billion. This brings the total consideration to €7 billion. The transaction, expected to close by the year-end, is projected to result in a €2 billion net capital gain for SAN.
Following the completion, Banco Santander will retain around 13% of Santander Polska and intends to fully acquire Santander Consumer Bank Polska by purchasing the remaining 60% stake from Santander Polska before closing.
Upon closure, SAN will temporarily operate with a CET1 ratio above its 12–13% target, with plans to return to this range by strategically deploying capital to drive profitable organic growth and investments that enhance earnings, returns and shareholder value. The bank will distribute 50% of the capital released—around €3.2 billion—via share buybacks, accelerating progress toward its €10 billion buyback target for 2025–2026.
Further, the transaction is expected to be accretive to SAN’s earnings by 2027-2028, with re-deployed capital supporting further growth through share buybacks, organic expansion and strategic acquisitions. This will enhance its flexibility to invest across existing markets in Europe and the Americas.
Financial Impact of the Transaction
Image Source: Banco Santander, S.A.
Since the announcement of the above-mentioned transaction, shares of Banco Santander have risen 3.6% on the NYSE.
Other Factors to Consider for Banco Santander
Expansion of Digital Bank: Per a recent filing with the Office of the Comptroller of the Currency, Banco Santander plans to close approximately 20 U.S. branches—around 5% of its U.S. retail network—by August, as part of its strategy to streamline operations and respond to the growing shift toward digital banking. This move aligns with the rapid growth of its U.S.-based digital platform, Openbank, which has already surpassed $2 billion in deposits since its launch in October 2024.
Originally relaunched in 2017, Openbank has grown to become Europe’s largest fully digital bank by deposit volume, operating across Spain, Germany, Portugal, the Netherlands, the United States and Mexico. Representing SAN’s broader commitment to innovation, Openbank leverages advanced technologies such as AI-powered financial tools and a Roboadvisor platform, offering customers a seamless and intelligent approach to saving and investing.
One Transformation Program: Launched in 2014, the One Transformation program focuses on digital transformation, operational efficiency and customer experience. As such, SAN created a common operating and business model for Retail and Commercial Banking segments, which continues to boost productivity, cut service costs and empower it to improve customer experience.
Driven by the One Transformation program, Banco Santander kicked off 2025 in a strong fashion, with its first-quarter 2025 net profit of €3.4 billion marking a fourth straight quarterly record. The company posted 19% year-over-year growth in net profit on revenues of €15.5 billion, which rose 5% in constant currency terms.
One Transformation Execution
Image Source: Banco Santander, S.A.
Additionally, SAN is on track to achieve its 2025 targets, including almost €62 billion of revenue and mid-high single-digit growth in net fee income in constant euros.
2025 Targets
Image Source: Banco Santander, S.A.
Analyst Sentiments Bullish for SAN
The Zacks Consensus Estimate for Banco Santander’s 2025 revenues suggests a 3.6% decline on a year-over-year basis because of a challenging operating backdrop. On the other hand, 2026 revenues are expected to grow 3.4%.
Further, the consensus estimate for earnings indicates a 12.1% and 12.2% increase for 2025 and 2026, respectively. Earnings estimates for both years have been revised upward over the past 30 days.
SAN’s Earnings Trend
Image Source: Zacks Investment Research
Banco Santander’s Price Performance & Valuation Analysis
Banco Santander’s shares have performed extremely well on the bourses this year. The stock has soared 62.3% so far this year compared with the industry’s rally of 16.1%. Also, it has outperformed its peers, Barclays (BCS - Free Report) and HSBC Holdings (HSBC - Free Report) , in the same time frame.
SAN YTD Price Performance
Image Source: Zacks Investment Research
Now, let’s take a look at the value SAN offers investors at current levels.
At present, Banco Santander is trading at 1.25X 12-month trailing price/tangible book (P/TB), below its five-year median of 0.71X. Meanwhile, the industry has P/TB TTM of 2.18X. Hence, the stock looks inexpensive compared with the industry average.
SAN P/TB TTM
Image Source: Zacks Investment Research
Further, Barclays has a P/TB TTM of 0.70X and HSBC’s P/TB TTM is 1.02X. So, Banco Santander is trading at a premium compared with Barclays and HSBC.
How to Play Banco Santander Stock Now
SAN’s efforts to restructure its business to improve operating efficiency through the One Transformation program and digital expansion plan are projected to drive growth. Yet, a tough operating backdrop because of global macroeconomic headwinds and not-so-impressive loan demand is likely to act as a spoilsport to some extent.
Nonetheless, bullish analyst sentiments and inexpensive valuation make Banco Santander stock a lucrative bet for investors.
Currently, SAN carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.