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During these troubled times for the Spanish banks, with Bankia being taken over by the government, along with the need for a 19 GEUR cash-injection, is Santander next? How would that affect Ferrari then?
"I spent most of my money on wine and women...I wasted the rest"
I doubt that Santander will have the same problems as Bankia. Although it is a Spanish company most of their business comes from somewhere else. Particularly Brasil where they are doing very well. Their status' are still A-, A2 and BBB.
Santander hasn't over leveraged, and as RMVR mentions, has very good business in booming brazil.
Not only that, but they diversified into car insurance about a year back, and are doing very well on that front in the lucrative uk car insurance market.
If they do take a slight hit, the first thing that will go will be jobs.
News has it that Catalunya Banc, Nova Caiza Galicia and Banco Valencia is next in line with a combined 30 GEUR need,
could it really be that Santander is that much better off?
"I spent most of my money on wine and women...I wasted the rest"
I actually have shares in Santander (don't ask me why, it was a big mistake not because they sponsor Formula 1 though) so I follow the company a bit and they are doing fine. If you remember that a consortium of banks took over ABN Amro, the Dutch bank, just before the crisis and two of the three went nearly bust because of it (Fortis and RBS if I'm not mistaken), but Santander got all the nice goodies which were actually worth money. They've benefited a lot in the crisis, vastly expanding in profitable markets in Europe and South America, the only problem being the Spanish market. But Santander is much different than those local Spanish banks that are imploding because of the real estate bubble in Spain.
And hey, I still get dividends every once in a while so they mustn't be doing that badly.
Santander sponsor more than just Ferrari, they also sponsor McLaren, and the Spanish, Germain, British & Italian GPs. Just RBS sponsored Williams as well as circuits. We saw that RBS needed to be nationalised, yet they honoured the existing sponsorship deals, albeit using get out clauses at the first opportunity.
So if Santander needs nationalising I'd expect an orderly exit from sports sponsorship over a year or two, just like RBS. It would have a deflationary impact on those sports when they go cap in hand to new sponsors trying to fill the gap.
The other thing I'd expect is nationalising like RBS rather than failure like Lehman. The difference lies in RBS and Santatander primarily acting as deposit or retail banks with tax payer underwriting to protect our savings. In contrast Lehman was an investment bank speculating and gambling to make (or lose) money with no deposit protection. Investments can up and down so you have to be prepared to lose your money.
So the on-topic answer relating to F1 is that there will be a deflationary impact on all team budgets, but not a catastrophic collapse for F1. Other sponsors will still be there even if one of the dominant players withdraws.
ps - lets try to keep some context of the impact on F1 - this is in the F1 section, as opposed to off-topic.
Personally, I believe other companies will always step in to fill a void. An awesome idea would be for Apple to sponsor. Jobs had a concept for an 'Apple Car' and what better way to promote that than through F1 the best prototype car series. Integrating Apple gear into an F1 team with iPads and iPhones would open a new area and move from being a purely domestic market to engineering and automotive. Apple also have HUGE cash reserves.
Santander, as long as other Spanish Banks like BBVA, Banesto, etc… are ok.
The problem in Spain were the so called “Cajas de ahorros”, these were “non profit Banks” ruled by politicians. During the economic boom, these “Cajas” were badly managed by politicians favoring construction companies and loaning mortgages to people who in reality couldn’t pay, this is what happens when you are not qualified for the job and you have nothing at stake… you make decisions that are based only in your own benefit or in your political party benefit.
After the construction fall in Spain, almost all “Cajas” were broke, so the previous Spanish government forced them to become banks, subject to the same laws as Santander, BBVA, etc…
Bankia is the result of the join of several of those “Cajas”, and is why is in big economic trouble, but the companies that were real Banks, and behaved like that, like Santander, BBVA, Banesto, Bankinter and many others, have no financial issues.
By no stretch of the imagination are these banks going to be 'alright'. Santander is leveraged up to the eyeballs, which is why they're offering the most attractive savings rates in places like the UK to make their balance sheets look anything other than totally dangerous. This is a cancer.
The difficulty for Ferrari is that beyond PM Santander are Ferrari's title sponsor in all but name.
This is not a financial forum but Santander is by no means "leveraged" compared with its peers. If you compare Santander or BBVA with the big french, german, english or swiss banks the tangible equity vs. total assets could well be three or four times higher. So, yes, Spanish banks are in bad shape, but that does not apply to Santander or BBVA which have most of their business abroad and are very well capitalised.
Santander will not fail or stop sponsoring F1, reason is that if the parent company dosnt sponsor anything other than the Spanish GP to the tune of €12m a year. McLaren and the British GP are sponsored by Sandander UK (The old Abbey National for us older folks), Ferrari and the Italian GP are sponsored by Santander Italia, the German GP is sponsored by Santander Deuchland. This is due to Santander setting up firewalls, so the cash that each subsiduary has in each nation cant go to propping up the main company in Spain. However if Spain fails or has difficulties, they can downsize there and run the bank efficiently, or in a lean mode till times are right for them to increase exposure again.
The main problem i could see is for the 2 GP2 teams and HRT. Racing Engineering and Barwa Addax both have bank with Santander and in the case of Barwa, get sponsored by Santander to the tune of €4m a year. HRT will have at least one Santander account somewhere, but they are exposed to the spanish contagon. Rumor has it that Addax and Racing Engineering are to merge and then become Barwa Engineering with HRT to have a name change to Addax F1 Team. The GP2 team would run out the Addax facility in Valencia, and any of the posts that were duplicated in the GP2 merger would then be offered a slot at Madrid in Addax F1.
That would leave a GP2 entry free, and rumore has it that Manor GP are interested, there is also more F1 teams interested in the GP2 entry if the Addax and Racing Engineering merger goes ahead.
not because they sponsor Formula 1 though) so I follow the company a bit and they are doing fine. If you remember that a consortium of banks took over ABN Amro, the Dutch bank, just before the crisis and two of the three went nearly bust because of it (Fortis and RBS if I'm not mistaken), but Santander got all the nice goodies which were actually worth money. They've benefited a lot in the crisis, vastly expanding in profitable markets in Europe and South America, the only problem being the Spanish market. But Santander is much different than those local Spanish banks that are imploding because of the real estate bubble in Spain.
