Banco Santander - An unusual high dividend yield banking stock

I had been a banking stock fan for quite a while. I would like to share with you a banking stock worth looking at. Its unusual high dividend yield is almost irresistible. (>10%)

The below are just my personal opinion. As usual, invest at your own risk.

I had been holding this banking stock for quite a while, and receiving good dividends from it. (Not in cash. I always convert the cash to share, to avoid taxing)

Why it is having high dividend yield?
It is a spanish bank. Property bubble and high unemployment rate (~30%) seems scary. Market gives a very low valuation for spanish banks right now, because they feel the spain can go bust anytime. So do their banks :p

Is it safe?
Highly international diversify business. >50% of its profit are generated from Latin America.

[Image: san-profit-by-region-090513_large.png]

Its dividend payout ratio is more than 100%. Is it sustainable?
They are busying cleaning up the bad loan in recent few years due to Spanish property bubble. I think it is almost over. Very soon, their dividend payout ratio shall back to normal level.

So, while waiting for Europe economy recovery, I'm happy to hold this stock for long period, to collect its handsome dividend.

For more info, kindly read on http://beta.fool.com/mattriskoffsmith/20...tun/34015/

This is the information for the bank https://en.wikipedia.org/wiki/Santander_Group One of the largest bank in the world. I think no other banks has such an international diversity business, except HSBC.

Thanks for sharing, but my very layman understanding is that a lot of European countries impose exhorbitant witholding taxes on dividends.

Do you have any idea what is the applicable tax rate on dividends for a Singaporean investor owning Spanish stocks?

Now its big problem is emerging Latin American market.

its European continental(north Europe or south Europe) is okay. It's Brazil, which is a large market for Banco Santander, that is going to shake the company.

Withholding tax is 21%, and no withholding tax if taking scrip

(21-06-2013, 11:11 AM)mobo Wrote: Thanks for sharing, but my very layman understanding is that a lot of European countries impose exhorbitant witholding taxes on dividends.

Do you have any idea what is the applicable tax rate on dividends for a Singaporean investor owning Spanish stocks?

listed on NYSE apparently so its US listed?

Freedom, why is Brazil a major blip to Santander future profit. Is something wrong with the brazil economy currently?

Banco Santander is listed on several countries stock exchange, its primary listing is Spain. Btw Keppel Corp can be bought and sold in US as well through ADR.

(21-06-2013, 12:08 PM)CY09 Wrote: Freedom, why is Brazil a major blip to Santander future profit. Is something wrong with the brazil economy currently?

Banco Santander is listed on several countries stock exchange, its primary listing is Spain. Btw Keppel Corp can be bought and sold in US as well through ADR.

Brazil, just like Australia, is a natural resource country. for years, it feeds on the appetite from China for its growth. Now that China's growth is just a bit slower(but still huge growth compared to the rest of the world), both Australia and Brazil already feel the pinch. China's growth will continue to slow down the pace of its growth, I don't see a bright future for both countries.

Another problem in Brazil, its NPL is quite high; especially, after its central bank started to lower the interest rate and the national banks started to push consumer interest rate lower.

Like India, Brazil also faces capital outflow problem, with its currency plunging. Brazil need to fix its current account problem.

(21-06-2013, 11:11 AM)mobo Wrote: Thanks for sharing, but my very layman understanding is that a lot of European countries impose exhorbitant witholding taxes on dividends.

Do you have any idea what is the applicable tax rate on dividends for a Singaporean investor owning Spanish stocks?

I'm not sure. But I would suggest you choose to receive in stock instead of cash. With this, you can avoid double tax treatment. Spanish government will charge you once. US government will charge you again. I had been holding this stock for quite some time. Absolutely happy with its dividend return, while watching market rumor (Like spain is going to bankrupt soon...) flying around.

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(21-06-2013, 11:48 AM)BlueKelah Wrote:

(21-06-2013, 11:11 AM)mobo Wrote: Thanks for sharing, but my very layman understanding is that a lot of European countries impose exhorbitant witholding taxes on dividends.

Do you have any idea what is the applicable tax rate on dividends for a Singaporean investor owning Spanish stocks?

listed on NYSE apparently so its US listed?

It is spain company. But ~50% profit derived from Latin America. It is listed in Spain stock market, and US stock market.

(10-09-2013, 11:54 PM)yccheok Wrote:

(21-06-2013, 11:11 AM)mobo Wrote: Thanks for sharing, but my very layman understanding is that a lot of European countries impose exhorbitant witholding taxes on dividends.

Do you have any idea what is the applicable tax rate on dividends for a Singaporean investor owning Spanish stocks?

I'm not sure. But I would suggest you choose to receive in stock instead of cash. With this, you can avoid double tax treatment. Spanish government will charge you once. US government will charge you again. I had been holding this stock for quite some time. Absolutely happy with its dividend return, while watching market rumor (Like spain is going to bankrupt soon...) flying around.

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(21-06-2013, 11:48 AM)BlueKelah Wrote:

(21-06-2013, 11:11 AM)mobo Wrote: Thanks for sharing, but my very layman understanding is that a lot of European countries impose exhorbitant witholding taxes on dividends.

Do you have any idea what is the applicable tax rate on dividends for a Singaporean investor owning Spanish stocks?

listed on NYSE apparently so its US listed?

It is spain company. But ~50% profit derived from Latin America. It is listed in Spain stock market, and US stock market.

Hi - am long this stock. I have not found a way to avoid the WHT on cash, so always take my dividend in shares. It is the same problem with bonds issued by Spanish companies...

If you take scrip or selling scrip share for cash, you won't incur withholding tax. of course you must hold ADR of Banco Santander and JP Morgan always offers 3 options.

1. scrip, no withholding tax
2. sell share for cash, no withholding tax, but depends on market price.
3. cash, with 21% withholding tax.

both 1 & 2 don't have withholding tax.

(11-09-2013, 11:38 AM)freedom Wrote: If you take scrip or selling scrip share for cash, you won't incur withholding tax. of course you must hold ADR of Banco Santander and JP Morgan always offers 3 options.

1. scrip, no withholding tax
2. sell share for cash, no withholding tax, but depends on market price.
3. cash, with 21% withholding tax.

both 1 & 2 don't have withholding tax.

It has no cash on hands, but debts. Can it sustain?

and 2012 net profit after tax was down 2 times from 2011. Nevertheless dividends are high.