The region already contributes 43% of the group’s net income but its importance to Santander will be greater still as the growing disparity in economic outlook between it and the bank’s core markets in Europe becomes more marked.
Santander’s net profit in Latin America in 2010 reached €4.8 billion ($6.9 billion), a 25% increase on the previous year. The bank has a presence in seven countries in the region.
Francisco Luzon, head of Latin America at the bank, says: “If you look at the financial systems in the region, they are growing on average at 15% to 20% – in Brazil it’s 25% – so we feel we are in a good position to see a continued growth in profits in Latin America of 20% or more.”
He adds: “Over the next two years, the region should contribute between 45% and 50% of the group’s total profits, and in three years it could be 50%.”
Brazil leads the way
Leading the way will be Brazil, says Luzon. The country accounts for one-quarter of Santander’s bottom line, nearly double Spain’s contribution.
Santander has invested $27 billion in Brazil in the past 10 years.