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Banco Santander - HYP candidate?

General discussions about equity high-yield income strategies
spiderbill
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Banco Santander - HYP candidate?

#153165

Postby spiderbill » July 18th, 2018, 3:28 pm

Having recently had a forced sale of Laird (non-HYP) and doing some transfers from non-ISA to ISA have given me a little cash for a top-up or a new share, so I've been casting around to see what might be worth buying. Most of my "trusted" shares are over median at the moment (and have dropped due to Trump's trade war shenanigans) and most of the rest feel a bit too risky, so I was looking through my watch lists and noticed Banco Santander.

Having risen strongly from a low in early 2016 till the middle of last year, its taken a tumble receently. I notice that there's been very little discussion of it here - is it not considered a HYP candidate or is there some other reason for avoiding it that I haven't spotted yet?

cheers
Spiderbill

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Re: Banco Santander - HYP candidate?

#153168

Postby Raptor » July 18th, 2018, 3:52 pm

Have you read the "board guidance" thread.

Might be this
and be drawn from the constituents of the FTSE 350 index


Hope this helps. Raptor.

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Re: Banco Santander - HYP candidate?

#153175

Postby Breelander » July 18th, 2018, 4:28 pm

Raptor wrote:Have you read the "board guidance" thread.

Might be this
and be drawn from the constituents of the FTSE 350 index


Hope this helps. Raptor.


Banco Santander is an unusual case. It is traded on the London stock exchange but not included as a ftse100 member. If it were included it would rank 8th between Diageo and Rio Tinto. See http://www.stockchallenge.co.uk/ftse.php

Other such special cases that are known to be held in some HYPs reported here include South32 Ltd (would be ranked 44th) and by all accounts Unilever (currently ranked 9th) is not likely to be included in the ftse100 after it completes its reorganisation. Lower down we find Daily Mail and General Trust (would be 158th).

Are we banned from talking about them too? Or should they be regarded as in the ftse350 in spirit, if not in fact?

tjh290633
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Re: Banco Santander - HYP candidate?

#153187

Postby tjh290633 » July 18th, 2018, 5:29 pm

Not a share that I follow, but do they not pay their dividends in Euro?

TJH

kempiejon
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Re: Banco Santander - HYP candidate?

#153198

Postby kempiejon » July 18th, 2018, 6:17 pm

tjh290633 wrote:Not a share that I follow, but do they not pay their dividends in Euro?

TJH

I hold, a vestige from Alliance and Leicester, I think which might have been an HYP1 pick? I get my dividends in shares from Halifax

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Re: Banco Santander - HYP candidate?

#153202

Postby monabri » July 18th, 2018, 6:34 pm

The divis are paid in Euro:-

https://www.dividenddata.co.uk/ex-divid ... chTerm=bnc

The share goes XD on 30th July with payment on 1st August (a surprisingly short time between XD and pay). The sum is Euro 0.065 (equating to about 1.4%).

SimplyWallStreet (SwS)describes them as "Good value with adequate balance sheet". The adequate description is possibly due to (SwS)

- Banco Santander has a low allowance for bad loans.
- Banco Santander has a high level of bad loans (greater than 2%)

(this might be a factor IF there is a credit crunch and people start to default on their loans).

The current divi is ~3.9% (based on a share price of £4.08 GBP) BUT is forecast to increase to 5.26% next year (seems a big jump to me!).


Ok, it's something new but why not buy "top of the FTSE shop" HSBA (current yield 5.5% but dividends are in US dollars) or Lloyds at 4.9% (too much UK focus??)?

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Re: Banco Santander - HYP candidate?

#153204

Postby PinkDalek » July 18th, 2018, 6:44 pm

monabri wrote:The divis are paid in Euro:- ...


but aren't they subject to Spanish withholding tax (I haven't looked at the treaty re when held in an approved pension scheme) if taken as cash? Whereas kempiejon would appear to have elected for the scrip dividends***, where no wht but has a CGT consequence.

In more detail:

https://www.santander.com/csgs/Satellit ... ation.html and https://www.santander.com/csgs/Satellit ... ation.html


*** Looking further https://www.santander.com/csgs/Satellit ... dends.html that option seems to only be available once a year?


Far too complicated for this Mr Doris.

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Re: Banco Santander - HYP candidate?

#153206

Postby Breelander » July 18th, 2018, 7:07 pm

kempiejon wrote:I hold, a vestige from Alliance and Leicester, I think which might have been an HYP1 pick?


Yes, Alliance and Leicester was a founder member of HYP1 (and my HYP too).

PinkDalek wrote:Far too complicated for this Mr Doris.


Me too - so I sold my Alliance and Leicester just before the takeover completed. As I recall, Pyad did the same in HYP1.

pyad (2008) wrote:Because of the tax deductions involved in holding Santander it was decided to sell A & L and transfer the cash into another share.
https://web.archive.org/web/20161112154 ... 13197.aspx

spiderbill
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Re: Banco Santander - HYP candidate?

#153207

Postby spiderbill » July 18th, 2018, 7:33 pm

Hi guys, thanks for the comments.

I'd assumed that it must be special case for it to have got on my watch list at all, but couldn't recall where the suggestion had come from. The dividends in Euros isn't a problem as I already get some in my ii account from a European IT and in any case I live part of the time in Slovenia so they can always be spent directly.

However I'd not realised the Spanish withholding tax (slaps forehead). It looks as if it's 10% once the UK tax reclaim is taken into account but that's still enough to make it a bit less of an attraction, plus the administrative hassle, so I'll probably leave it after all.

As for HSBC it's already one of my largest holdings (happy with it but can't justify any more at the moment), and I have a fair bit of Lloyds too, which seems to stagger from one disappointment to another.

Back to the watch list for another look, and think things through better this time.
Thanks again
Spiderbill

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Re: Banco Santander - HYP candidate?

#153223

Postby Raptor » July 18th, 2018, 8:46 pm

Moderator Message:
Am moving this thread from Practical to Strategy. Will keep a shadow on practical as some may have the share from previously having HYP shares in taken over companies. I feel this is better as poster was talking about a "new" purchase. Raptor.

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Re: Banco Santander - HYP candidate?

#153259

Postby Gengulphus » July 18th, 2018, 11:59 pm

spiderbill wrote:As for HSBC it's already one of my largest holdings (happy with it but can't justify any more at the moment), and I have a fair bit of Lloyds too, which seems to stagger from one disappointment to another.

With regard to Lloyds, what disappointments are you talking about? It had a disastrous time ten years ago, took a long time to properly rejoin the HYP candidate ranks (and indeed might not yet quite have done so for HYPers with exacting criteria), and one might regard its decision to drop paying a special dividend this year in favour of share buybacks as a bit of a disappointment from the income point of view. But its ordinary dividend record (which is the one companies are generally expected to try to maintain and preferably grow, the designation "special" normally carrying a "don't expect repeats" implication) since it resumed paying them has been 0.75p, 2.25p, 2.55p, 3.05p (increases of 200%, 13% and 20%), which seems very respectable to me, the WebFG (DigitalLook) forecast dividend is 3.39p (an 11% increase if it happens), its Q1 interim management statement looked both usefully detailed and pretty good to me, and it's available on the market at a decently high historical yield of 4.9% (forecast 5.4%).

It's not by any means the perfect HYP share, but if it's staggering from disappointment to disappointment, I hate to think what most of my HYP shares are doing! I can certainly understand not topping it up because of high weightings - I haven't been doing so myself for exactly that reason - and I can understand not liking really major disappointments many years ago, since I've suffered my share of them. But I can't see any recent disappointments that aren't a lot more attributable to me having somewhat unreasonably high expectations than to the company having done something poor...

I would add that with two banks, two insurance companies and two 'other finance' companies in my currently 38-share HYP, I'm not looking for any more financial companies for my HYP. Also that its interim results come out in two weeks' time, on Wednesday August 1st.

Gengulphus

spiderbill
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Re: Banco Santander - HYP candidate?

#153346

Postby spiderbill » July 19th, 2018, 11:09 am

Gengulphus wrote:It's not by any means the perfect HYP share, but if it's staggering from disappointment to disappointment, I hate to think what most of my HYP shares are doing!


If they're anything like mine they're reacting to political interference and trade wars! ;-)
Fortunately the dividends have mostly been immune so far but some of the capital values are a bit unfortunate (unless you are looking to top up of course).

Gengulphus wrote:But I can't see any recent disappointments that aren't a lot more attributable to me having somewhat unreasonably high expectations than to the company having done something poor...


I was really referring to their seeming inability to put the PFI scandal behind them - every time I read an article saying that the latest additional provision should be the last one they seem to find a need to chuck another few billion at it. Plus the HBOS business banking fraud. Really they should have been doing much better by now and many commentators had expected the share price to be over 100p. I agree that the dividend is decent but ditching the expected special was indeed a disappointment.

Gengulphus wrote: Also that its interim results come out in two weeks' time, on Wednesday August 1st.


Thanks for the heads up on that - been too busy recently to keep up to date on forthcoming events but will watch with interest.

cheers
Spiderbill

kempiejon
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Re: Banco Santander - HYP candidate?

#156920

Postby kempiejon » August 3rd, 2018, 11:49 am

I have just noticed that today/yesterday I was given hard cash for my BNC dividend. Often Halifax has only given me extra shares and no options, something about there being too little time to process the requests.
1 Additional Banco Santander S.A. Ordinary share for every 142 Allotment Rights held on the Ex-entitlement Date, 18th October 2017.

The Company has announced the details of its 'Santander Dividendo Eleccion' Remuneration Scheme for November 2017.

The Scheme allows shareholders to benefit from favourable tax-treatment by receiving the payment of their dividend in the form of Additional Banco Santander S.A. Ordinary shares. Alternatively, the dividend can be received in the form of a cash payment which is subject to 19 percent Spanish Withholding Tax.

Having considered the tax implications of receiving the cash payment and the short timescales imposed by the Company, we will be applying the default election (to receive payment of the dividend in the form of Additional Ordinary shares) to all Banco Santander S.A. Ordinary shares held within our Nominee on the basis of 1 Additional Banco Santander S.A. Ordinary share for every 142 Allotment Rights held

PinkDalek
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Re: Banco Santander - HYP candidate?

#156955

Postby PinkDalek » August 3rd, 2018, 1:39 pm

kempiejon wrote:I have just noticed that today/yesterday I was given hard cash for my BNC dividend. Often Halifax has only given me extra shares and no options, something about there being too little time to process the requests.


I am not a holder but the link I provided earlier https://www.santander.com/csgs/Satellit ... dends.html suggests you only get the non cash option once a year. The other 3 dividends appear to be in cash, where you may suffer the 19% Spanish withholding tax.

The first dividend was paid on 1 August with a cash value of 6.5 euro cents per share. The second is scheduled for November 2018 through the Santander Scrip Dividend Scheme, allowing shareholders to choose between receiving remuneration in cash and/or shares**. The full cash payout from this scheme is expected to be approximately 3.5 euro cents per share

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Re: Banco Santander - HYP candidate?

#157155

Postby Bouleversee » August 4th, 2018, 3:59 pm

I have a few in an ISA as a result of a holding in A&L. I have taken the share alternative when offered but the s.p. has not exactly motored over the past number of years since the t/o, has it? I should have got rid of them years ago.


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