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Santander Stock Jumps 5.3% Following Plans to Invest $15 Billion in Mexico

02 November, 2015

Proving once again that Mexico is a strong investment, Grupo Financiero Santander Mexico (BSMX) reported profits of $259 million in the fourth quarter, posting earnings of around .19 cents per share and revenues of $954.4 million in the period. For the year, Yahoo! Finance reports Santander posted profits of $949.2 million, which equates to about .70 cents per share, with annual revenues at around $3.75 billion.

“Santander Mexico was a big mover last session, as the company saw its shares rise over 5%,” reported Zacks on Jan. 23rd. “The move came on solid volume too, with far more shares changing hands than in a normal session.”

This positive forward momentum prompted Credit Suisse to upgrade shares of Santander to a neutral rating in a report issued in late January, with Zacks researchers advising readers to “make sure to keep a close watch on this firm in the near future.”

Santander Mexico is part of the Spanish-owned Santander Group, which is centered on Banco Santander,S.A. As the largest bank in the Eurozone by market value, Santander is also one of the largest banks in the world in terms of market capitalization after major expansions in recent years to Europe,Latin America, North America and Asia.

The recent price hike and stock upgrade comes after an announcement In December of 2014, when Banco Santander executive chairman Ana Botin released plans for a $15 billion investment to finance infrastructure projects and business expansion in Mexico over the next two to four years.

“Santander’s commitment is to invest $10 billion in the next three to four years in the infrastructure area in Mexico, and to invest an additional $5 billion in lending to small and mid-sized businesses,” shared Botin at a press conference. “These are very important figures and will allow the bank to grow together with Mexico over the next few years.”

Botin revealed the Spanish-based bank is willing to take such a huge leap of faith in Mexico because the country has demonstrated a consistent upward trajectory of development and progress. As a result, Santander is prepared to finance projects in the energy and telecom sectors, as well as other industries that are open to outside investment.

“We have always supported those who take risks,” shared Botin in a Fox News interview. “The now is to support the tech companies that were key to the economy of the future and will be where the jobs are.”

Zacks also recently upgraded Santander Mexico, giving it a neutral rating of 3, with one analyst rating the company as a “strong buy.” Finally, Zacks also reported that the bank received an average rating of 3.08 from six brokerage firms and urged anyone “sitting on huge profits” to consider selling, since shares have posted consistent gains in recent months.

Topics: Investment Mexico Stock Market