Spanish banks have established a firm foothold in Latin America, hoping that the region’s dynamic growth would balance out problems in their domestic market. The decision paid off handsomely, as Latam business kept booming while profits in Spain faltered.
However, while Spain’s economy is finally on the up, challenges are now mounting in Latin American. Last year, profits from the Latin American operations of Spain’s two largest banks – BBVA and Santander – showed significant drops (see chart) due to exposure to ailing local markets.