Banco Santander Plans 1 2 Billion Brazil Investment

Spanish banking giant Banco Santander SA plans to invest 2.6 billion Brazilian reais ($1.2 billion) in Brazil during the next two years as part of its plans to expand its business by 15%, Santander Chairman Emilio Botín said Friday.
[Botin, Emilio]

Emilio Botin

Speaking here, Mr. Botín said the company's aim is to become Brazil's largest private bank in terms of profits, though not in assets, overshadowing local rivals Banco Bradesco SA and Banco Itau Holding Financiera SA. "Brazil is one of Banco Santander's priorities and this plan represents a decisive step toward becoming the No. 1 private bank in the country," he said.

The company's net profit in Brazil is expected to reach 7.9 billion reais by 2010, up from a forecast 4.8 billion reais in 2008, boosted by funds from Banco Real, which Santander acquired last year from Dutch bank ABN Amro Holding NV.

Mr. Botín said Brazil's economy is in the best shape in decades and well prepared to face the current financial crisis. Brazil's central bank has announced a stream of measures to ensure small and midsize banks don't fold amid the credit crunch.

Santander expects its Brazilian operations will boost its annual profit growth by 5% between 2008 and 2010. "Brazil offers tremendous potential for growth as it is well set to ride out the global slowdown," said Fabio Barbosa, Santander's chief executive in Brazil.

Santander's goal is to raise its share of the Brazilian market from the current level of 10%-12% through organic growth rather than through acquisitions.

Earlier this week, Santander posted a 4.4% increase in third-quarter net profit, boosted by higher lending profitability and the takeover of Banco Real. Profit at Santander's Latin American franchise rose 6% to €2.17 billion ($2.77 billion). In dollar terms, profit from Latin America was up 20%.

http://online.wsj.com/article/SB122567015839791701.html

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Banco Santander Plans 1 2 Billion Brazil Investment