Essay on Business Plan

Santander SA (BNC LN) is listed on the London Stock Exchange. Its business model is based on retail banking activities which are widely distributed through Europe, Latin America and the United States. In 2011, income from the retail banking business reached 86% of the total profits. This model is complemented by global activities in wholesale banking, asset management, private banking, insurance, payment methods, and consumer finance. Santander approach consists on geographical diversification, commercial focus, prudence in risks, efficiency and disciplined use of capital.
Geographical and Business Segmentation Analysis1 Region Santander BBVA HSBC
Latin America2
22’442 (49.16%)
10’007 (48.59%)
11’453 (15.13%)
Europe
21’025 (33.62%)
6’357 (30.87%)
24’246 (32.03%)
North America
2’188 (4.79%)
2’277 (11.06%)
16’000 (21.14%)
Asia/Other
4’507 (9.39%)
1’952 (9.48%)
21’395 (28.26%)
Table 1 - 2011 Geographic segmentation of Santander and Competitors (millions EUR)
There is a strong dependency of BBVA and Santander revenues in Latin America. HSBC is more globally diversified obtaining a significant amount of revenues from Europe, US and Asia. Segment Santander BBVA HSBC
Retail banking
39’892 (90.5%)
20’593 (82.16%)
33’533 (42.64%)
Wholesale Banking
4’675 (10.61%)
2’724 (10.87%)
32’668 (41.54%)
Other
-489 (-1.11%)
1700 (6.78%)
6’079 (8.39%)
Table 2 - 2011 Business segmentation revenues (millions EUR)
Table 2 shows that Santander and BBVA receive the majority of their revenues from retail banking. There is a strong similarity in Santander and BBVA business models; therefore the comparison primarily focuses on BBVA more than any other competitors.
1 Due to the lack of data for 2012, the information from the year 2011 was used.
2 Latin America: Brazil, Mexico, Chile, Argentina, Puerto Rico, Uruguay, and others
Santander Group
MA 9 - Phoenix 4
FINANCIAL ANALYSIS
Figure 1: Revenue and Income
Implications
 As a retail bank Santander has lower exposure to credit markets3. A diversified geographical market4 has contributed to robust growth in revenues and net

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