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Santander has overtaken UBS as continental Europe’s most useful financial institution after Donald Trump’s tariff-induced market rout hit the Swiss lender tougher than friends.
UBS’s shares have slumped practically 15 per cent because the US president introduced a raft of “reciprocal” tariffs on April 2, triggering a market sell-off. Shares within the Spanish lender have solely dropped about 5 per cent in that interval.
The strikes have left Santander with a market capitalisation of €91.3bn as of market shut on Wednesday, overtaking UBS which has a market worth of €85.7bn, in response to Bloomberg knowledge.
The shift in positions marks a symbolic turnaround for Santander, which has struggled to spice up its languishing share worth for a lot of the final decade, and underscores the challenges dealing with UBS.
The Swiss financial institution had held the crown of continental Europe’s most useful lender since August 2023, following its takeover of Credit score Suisse earlier that yr, and its market worth was approaching €120bn as just lately as February this yr.
Nevertheless, its share worth has considerably underperformed European friends in current weeks.
Johann Scholtz, an analyst at Morningstar, stated UBS’s shares had suffered following the announcement of Trump’s tariffs as a result of it had “considerably extra direct publicity to the US market than different European banks”, with a couple of third of its revenues coming from the US.
“UBS may be very market-dependent — greater than the common European financial institution — and additionally it is extra globally diversified than its friends, which isn’t useful if one assumes ongoing de-globalisation and geopolitical tensions,” stated Andreas Venditti, an analyst at Vontobel.
The “ongoing regulatory debate” in Switzerland “remained the principle cause” for UBS’s current underperformance versus European and US friends, Venditti added.
Final week, UBS chair Colm Kelleher hit out in opposition to the proposed reforms to financial institution capital guidelines in Switzerland, which have pitted the financial institution in opposition to the nation’s political and regulatory institution in a public row. Talking at UBS’s annual normal assembly Kelleher stated the “excessive” measures would pressure the lender to carry 50 per cent extra capital.
In the meantime, Santander has been certainly one of best-performing European financial institution shares this yr, with shares climbing by greater than a 3rd since January.
Though some traders within the Spanish group have questioned the strategic logic of its various geographic holdings, the financial institution’s govt chair Ana Botín stated earlier this month that the market was “recognising the worth of the group and the energy of our mannequin”.
“The board and I are satisfied that by executing our technique we’ll proceed to generate worthwhile progress. There may be nonetheless important upside.”
Most Eurozone lenders have benefited from a sector rally prior to now yr after weathering a fall in rates of interest and pledging document returns to shareholders. The Euro Stoxx Banks index, which tracks the most important lenders within the Eurozone, is up greater than 20 per cent since January, regardless of the current market turbulence.
Santander and UBS are adopted within the rankings by France’s BNP Paribas and Italy’s UniCredit, which have market capitalisations of €80.9bn and €78.9bn, respectively. HSBC stays probably the most helpful lender in Europe, together with the UK, with a market worth of £137.8bn.
UBS and Santander declined to remark.
