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Santander has overtaken UBS as continental Europe’s most valuable bank after Donald Trump’s tariff-induced market rout hit the Swiss lender harder than peers.
UBS’s shares have slumped nearly 15 per cent since the US president announced a raft of “reciprocal” tariffs on April 2, triggering a market sell-off. Shares in the Spanish lender have only dropped about 5 per cent in that period.
The moves have left Santander with a market capitalisation of €91.3bn as of market close on Wednesday, overtaking UBS which has a market value of €85.7bn, according to Bloomberg data.
The shift in positions marks a symbolic turnaround for Santander, which has struggled to boost its languishing share price for much of the last decade, and underscores the challenges facing UBS.
The Swiss bank had held the crown of continental Europe’s most valuable lender since August 2023, following its takeover of Credit Suisse earlier that year, and its market value was approaching €120bn as recently as February this year.
However, its share price has significantly underperformed European peers in recent weeks.
Johann Scholtz, an analyst at Morningstar, said UBS’s shares had suffered following the announcement of Trump’s tariffs because it had “significantly more direct exposure to the US market than other European banks”, with about a third of its revenues coming from the US.
“UBS is very market-dependent — more than the average European bank — and it is also more globally diversified than its peers, which is not helpful if one assumes ongoing de-globalisation and geopolitical tensions,” said Andreas Venditti, an analyst at Vontobel.
The “ongoing regulatory debate” in Switzerland “remained the main reason” for UBS’s recent underperformance versus European and US peers, Venditti added.
Last week, UBS chair Colm Kelleher hit out against the proposed reforms to bank capital rules in Switzerland, which have pitted the bank against the country’s political and regulatory establishment in a public row. Speaking at UBS’s annual general meeting Kelleher said the “extreme” measures would force the lender to hold 50 per cent more capital.
Meanwhile, Santander has been one of best-performing European bank stocks this year, with shares climbing by more than a third since January.
Although some investors in the Spanish group have questioned the strategic logic of its diverse geographic holdings, the bank’s executive chair Ana Botín said earlier this month that the market was “recognising the value of the group and the strength of our model”.
“The board and I are convinced that by executing our strategy we will continue to generate profitable growth. There is still significant upside.”
Most Eurozone lenders have benefited from a sector rally in the past year after weathering a fall in interest rates and pledging record returns to shareholders. The Euro Stoxx Banks index, which tracks the biggest lenders in the Eurozone, is up more than 20 per cent since January, despite the recent market turbulence.
Santander and UBS are followed in the rankings by France’s BNP Paribas and Italy’s UniCredit, which have market capitalisations of €80.9bn and €78.9bn, respectively. HSBC remains the most valuable lender in Europe, including the UK, with a market value of £137.8bn.
UBS and Santander declined to comment.
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