Natixis wary of impact from Santander sale of AM business

The decision by Spain’s Santander to sell 50% of its asset management business in order to improve its solvency ratio has been greeted with caution by analysts at Natixis.

The deal will increase the solvency ratio by some 12bps, but will still leave it under the crucial 9% level at just 8.12%, according to Natixis’ analysis of the so-called FL B3 solvency ratio.

The net capital gains to Santander from the move are estimated at €700m.

“However, we remain cautious on the group due to its limited solvency compared with other large European banking groups (most have a FL B3 of over 9%) and, challenging operating momentum, not just in Spain but also in the UK and Brazil (where economic growth disappointed at just 1.9% yoy in Q1 13),” Natixis wrote in a note to its clients.

The stake in the asset management business is being sold to Warburg Pincus and General Atlantic. The deal values the business at €2.047bn, including a joint venture structure and 10-year distribution agreement.

As of 31 March 2013, Santander Asset Management had €152bn in AUM, with equities accounting for some 8% of this, bonds 39% and money market funds 36%.

Geographically the assets are 48% Latin America, 52% Europe. Net profit is estimated for 2013 of €155m, with gross commissions of €1.116bn, according to figures from Natixis.


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