Rating Outlooks
Banco Santander Central Hispano SA
13 April 2000
MOODY'S CHANGES TO POSITIVE FROM STABLE THE RATING OUTLOOKS OF BANCO SANTANDER
CENTRAL HISPANO (BSCH) AND OF ITS SUBSIDIARIES BANESTO AND HBF, BANCO
FINANCIERO
Moody's Investor Service changed to positive from stable the long-term deposit
rating and the financial strength rating outlooks of Banco Santander Central
Hispano (BSCH) and of its subsidiaries Banco Espanol de Credito (Banesto) and
HBF, Banco Financiero. The outlook changes reflect the ongoing improvement of
the group's financial fundamentals and the progress being made in integrating
the two banks - Banco Santander (BS) and Banco Central Hispano (BCH)
that merged in early 1999 to create BSCH. As it stands now, BSCH has the
potential to become a very meaningful participant in the consolidation of the
banking industry in Europe. Further strengthening of its credit outlook
is possible, noted the rating agency.
Much of the recent improvement in BSCH's fundamentals is attributable to the
bank's close attention to both operating and credit expenses, but also to a more
consistent strategy across business lines and geographical markets. Moreover,
BSCH's leading positions across a wide range of products combined with the
favourable economic conditions that prevail in Spain should allow the group to
sustain good recurring earning power for the foreseeable future.
At the same time, Moody's added that pursuing further efficiencies will remain
an ongoing challenge for the BSCH group - which currently has nearly 6,000
branches in Spain. The rating agency noted, however, BSCH's more decisive steps
to implement on online strategy - primarily through integrating its Open
Bank subsidiary into its newly-acquired portal Patagon.
Regarding the group's Latin American operations, Moody's noted the ongoing
growth initiatives (such as the interest in the Brazilian and Mexican markets),
expressing the belief that they will not entail a significant addition to BSCH's
overall risk profile.
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