Banco Santander SA has achieved a significant milestone by becoming the first bank in the European Union in nearly ten years to be valued at over €100 billion ($108 billion) due to increasing investor interest in the banking sector.
On Tuesday, the Spanish bank’s shares increased by 1.8% to €6.62, elevating its market capitalization to €100.3 billion. The last instance where a current EU bank closed a trading day at such a valuation was in 2015 when Santander itself reached that mark.
European banks have experienced a surge in share prices in recent years following the European Central Bank’s decision to end a period of negative interest rates in 2022, significantly enhancing bank profitability. Since then, the bloc’s banks have increased their payouts to investors.
Currently, Santander is the only EU bank with a market capitalization exceeding €100 billion. However, other lenders like BNP Paribas SA and Intesa Sanpaolo SpA are nearing similar valuations.
Outside the EU, Switzerland’s UBS Group AG boasts a higher market value. Additionally, London-based HSBC Holdings Plc has traded above this mark in recent years, including just before Brexit.
While the ECB has gradually reversed rate cuts since last year, the recent prospect of large-scale public spending in Europe has further boosted bank stocks. The region’s banks recently experienced their strongest winning streak since before the start of the new millennium.
JPMorgan analysts, including Kian Abouhossein and Delphine Lee, expressed a favorable outlook on the European banking sector, citing fiscal announcements led by Germany and the EU as positive drivers.
Santander’s stock has surged nearly 50% since the beginning of the year, making it one of the top performers in the European banking sector to date. Like its peers, Spain’s largest bank recently announced plans to increase its returns to investors. Chairman Ana Botin mentioned in a Bloomberg TV interview earlier this month that the bank’s growth strategy will focus more on the Americas.
This information was originally reported by Fortune.com.
