Banco Santander: Dividend of diversification and Latin America

Banco Santander is one of the Spanish banks downgraded early this year due to the crisis rocking the Euro but most especially the crisis in the home country where it all started for the bank . The crisis in the home country did not have much impact on the firms profitability looking at her half year report 2012.

" The situation in the country worries me but the situation of the bank does not" those are the words of Emilio Botin the Chairman of Santander. Reading these words gave me the indication how diversification is helping Santander to weather the storm in Euro by looking at the Latin America as the saviour.

Banco Santander entrance into the Latin America has shown significant rise on its impact on the bank attributable profit. The 2012 half year result shows the Latin America contributing 50% of the group's profit with Brazil the major contributor taking 26% compare to UK's 13% contribution. While financial institutions like Royal Bank of Scotland (RBS) and Lloyds bank are struggling with their financial position, Banco Santander is hedging the Euro crisis by looking at the Latin America to cushion the effect.