Santander Brasil focused on better profitability

Spanish bank Santander's Brazilian subsidiary is focused on improving its profitability in the medium and long-term, according to Deutsche Bank.

Deutsche Bank analysts attended an investor meeting with CEO Sergio Rial and CFO Angel Santodomingo and the executives said the bank will use its international reach to boost market share with exporters who require international funding.

Santander is also looking to generate retail business through its wholesale relationships.

The bank is focusing more on payroll lending and now has 5-6mn payroll accounts, and it has generated around 7-8bn reais (US$1.72-1.97bn) in payroll loans through its relationship with Banco Bonsucesso.

The top executives also said that they see attractive growth potential in the SME and auto finance segments.

Deutsche Bank noted that Santander's short-term guidance was limited, particularly due to Brazil's current economic crisis, but the bank's executives said the plan was to reach annual ROEs of 15-16% in the next few years. Deutsche Bank forecasts that Santander Brasil will report ROE of around 11% this year.

Santander saw its profits plummet in Brazil in 3Q15 and drop again in 4Q15.

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