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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 information.
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 previous decade, and underscores the challenges going through 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 lately as February this yr.
Nonetheless, its share worth has considerably underperformed European friends in latest weeks.
Johann Scholtz, an analyst at Morningstar, mentioned 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 could be very market-dependent — greater than the common European financial institution — and it’s also extra globally diversified than its friends, which isn’t useful if one assumes ongoing de-globalisation and geopolitical tensions,” mentioned Andreas Venditti, an analyst at Vontobel.
The “ongoing regulatory debate” in Switzerland “remained the primary purpose” for UBS’s latest underperformance versus European and US friends, Venditti added.
Final week, UBS chair Colm Kelleher hit out towards the proposed reforms to financial institution capital guidelines in Switzerland, which have pitted the financial institution towards the nation’s political and regulatory institution in a public row. Talking at UBS’s annual common assembly, Kelleher mentioned the “excessive” measures would drive the lender to carry 50 per cent extra capital.
In the meantime, Santander has been one in every 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 numerous geographic holdings, the financial institution’s government chair Ana Botín mentioned earlier this month that the market was “recognising the worth of the group and the power 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 vital upside.”
Most Eurozone lenders have benefited from a sector rally up 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 largest lenders within the Eurozone, is up greater than 20 per cent since January, regardless of the latest 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 priceless lender in Europe, together with the UK, with a market worth of £137.8bn.
UBS and Santander declined to remark.
