Banco Santander (SAN.MC): SAN Group announces offer to acquire minorities at SAN Brasil

Research evidence excerpt

Banco Santander (SAN.MC): SAN Group announces offer to acquire minorities at SAN Brasil

Banco Santander (SAN.MC)

31 July 2026 Citi Research

could increase Brazil's contribution to SAN Group profits by c.1pp to c.16% by 2028E. That said, we would expect a

muted market reaction given the relatively small financial impact and investors' recent focus on weaker profitability

trends in Brazil.

• Recap of prior related developments: SAN previously launched a similar minority buyout for SAN Brasil in 2014 at a

20% premium, reinforcing management's long-standing preference for increasing exposure to the franchise when

valuation opportunities arise. We also note that SAN delisted the Mexico subsidiary by gradually increasing

ownership throughout several years.

• Recap from SAN indications on Brazil during the 2Q26 results call:

o In Brazil, SAN reiterated its c.20% RoTE target by 2028E, supported by improved portfolio mix and expected

rate normalization. Management expects the SELIC rate to decline to c.13.5-14.0% by YE26, before falling

gradually by c.100-150bps over the next couple of years.

o In Brazil, asset quality was impacted by single names, with cost of risk at c.414bps in the last 12 months as

of 2Q26. Management has tightened underwriting standards in Brazil, with a shift towards trade finance in

the corporate side (with c.30-40% of local CIB/commercial portfolios denominated in USD), and focus on

affluent customers.

• In our recent detailed report we analysed SAN Brasil NII outlook, asset quality and macro in detail.

Figure 1. SAN - EPS and TBVPS accretion from the announced

transaction as per CITIe (highly preliminary)

© 2026 Citigroup Inc. No redistribution without Citigroup's written permission.

Source: Citi Research