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Santander has overtaken UBS as continental Europe’s most precious financial institution after Donald Trump’s tariff-induced market rout hit the Swiss lender tougher than friends.
UBS’s shares have slumped almost 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 accordance with Bloomberg information.
The shift in positions marks a symbolic turnaround for Santander, which has struggled to spice up its languishing share value for a lot of the previous decade, and underscores the challenges dealing with UBS.
The Swiss financial institution had held the crown of continental Europe’s most precious lender since August 2023, following its takeover of Credit score Suisse earlier that yr, and its market worth was approaching €120bn as not too long ago as February this yr.
Nonetheless, its share value has considerably underperformed European friends in current weeks.
Johann Scholtz, an analyst at Morningstar, stated UBS’s shares had suffered following the announcement of Trump’s tariffs as a result of it had “significantly more direct exposure to the US market than other European banks”, with a few third of its revenues coming from the US.
“UBS is very market-dependent — more than the average European bank — and it is also more globally diversified than its peers, which is not helpful if one assumes ongoing de-globalisation and geopolitical tensions,” stated Andreas Venditti, an analyst at Vontobel.
The “ongoing regulatory debate” in Switzerland “remained the main reason” for UBS’s current 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 normal assembly, Kelleher stated the “extreme” measures would power 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 buyers within the Spanish group have questioned the strategic logic of its various geographic holdings, the financial institution’s government chair Ana Botín stated earlier this month that the market was “recognising the value of the group and the strength of our model”.
“The board and I are convinced that by executing our strategy we will continue to generate profitable growth. There is still significant upside.”
Most Eurozone lenders have benefited from a sector rally previously yr after weathering a fall in rates of interest and pledging document returns to shareholders. The Euro Stoxx Banks index, which tracks the most important lenders within the Eurozone, is up greater than 20 per cent since January, regardless of the current 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 essentially the most beneficial lender in Europe, together with the UK, with a market worth of £137.8bn.
UBS and Santander declined to remark.
