Banco Santander (SAN) Soars 1.06% on TSB Acquisition

Banco Santander's (SAN) share price surged 1.06% today, marking its second consecutive day of gains and reaching its highest level since December 2014 with an intraday gain of 1.06%.

The strategy of buying Banco Santander (SAN) shares after they reached a recent high and holding them for one week underperformed the market. The annualized return was -1.5% over the past five years, compared to a positive return of 2.5% for the SPY ETF, which represents the S&P 500 index. This indicates that relying on recent highs as a buying trigger and holding for a short duration is not a profitable strategy, as it failed to capture broader market gains.

Banco Santander's recent stock price movements have been significantly influenced by its acquisition of TSB. This strategic acquisition, valued between £2.65 billion and £2.9 billion, is aimed at bolstering Santander's presence in the UK banking sector, potentially positioning it as the third-largest bank in the country. This move is anticipated to boost the return on tangible equity (RoTE) of Santander's UK division from 11% in 2024 to 16% by 2028.

The acquisition of TSB is part of Santander's broader strategy to enhance its market position and financial performance. The positive market reaction to this strategic development has contributed to Banco Santander's stock hitting a new 12-month high. Analysts have also expressed optimism, with Jefferies maintaining a Buy rating and Citi giving a Strong Buy consensus, indicating significant upside potential.