Spanish banks: A rock and a hard place

Spanish banks: A rock and a hard place

Europe Bonds

By John Rumsey Most market watchers see the idea of a Spanish banking parent with semi-independent and profitable Latin subsidiaries holdings as an eminently viable business model. The argument is not hard to grasp: high profits from Latin America would bolster consolidated results and allow conservatively managed Spanish giants to meet tough reserve and provisioning requirements at home. Indeed, at first glance, Latin businesses for Spanish banks seem indispensable. Santander group profits have fallen, of late, dramatically, slowing from €8.18 billion ($10.1 billion) in 2010 to €5.35 billion last year. But profits from Latin America have held up well: they did decline, but margina

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