More praise for Spanish banking

As American, British and German regulators thrash around in useless unison in a last-ditch effort to save the financial world from its foibles, follies and foolish lending, Spanish bank Santander is poised to make more juicy pickings from the corpses of failing banks.

It has gobbled-up Abbey, Alliance & Leicester and Bradford & Bingley to become the second biggest savings player in the UK with 25 million customers and 10% of the market and has hundreds more High Street branches to welcome savers and from which to dispense a few mortgages.

Santander, stronger than most of its European rivals, seems at the top of its game and is poised for more acquisitions. There have been rumours of a takeover bid for Wachovia, America’s biggest savings bank.

Could this be as good as it gets for this Spanish bank? While Santander basks in the glory of positive press (including earlier blogs from ourselves), the world economy is quietly falling apart, thanks to a bursting property bubble, banking mismanagement and lax Governmental regulation.

Santander has become strong because it was forced to stay away from the dodgy off balance sheet dealings that have caused US and UK banks to dive in the resultant credit crunch. As a result of the higher-than-usual provisions needed to comply with Bank of Spain regulation, they took few risks and have a pot of dosh to buy the weak and infirm among rival banks.

All it needs now is for the Bank of Spain to declare they will guarantee all savings in Spanish banks and Santander could become a mighty magnet for savers in Spain, Britain and Latin America. It happened last week when the Irish Government gave a 100% savings guarantee and now followed confusingly by Germany.

It will not be lost on savers that Spain has regulated its banks better than the rest of the world and that includes the pathetic performance of the UK’s McBroon & Co. A choice between calm, ethical banking and chaotic, catch-up banking regimes is a no-brainer for general savers.

For savers wanting to buy a property in Spain, getting a decent mortgage from an Abbey branch near you might be worth checking-out? Local contact, international banking muscle, stronger currency as the euro outperforms sterling, are factors that provide reassurance – a rare commodity in the current economic climate…