(Bloomberg) -- Banco Santander (MC:SAN) SA is bracing for two more years of rock-bottom interest rates in the eurozone and will focus on cutting costs to compensate for the loss of income.
“It seems like this very loose monetary policy is going to continue for the next couple of years and in that case we have to respond by acting on what we can really control,” Chief Financial Officer Jose Garcia Cantera said in an interview on Bloomberg TV. “What we control is costs but it’s also responding to customer needs.”
The European Central Bank will decide on Thursday whether the euro zone needs more stimulus as its global peers move to shore up a recession-threatened global economy. Investors and economists are increasingly calling for action or for a signal that President Mario Draghi will deliver a last burst of monetary support before his term ends in October.
Cantera said that while Santander’s business would be affected by an economic slowdown triggered by a trade war, the global spread of the bank’s business mitigates the threat from an escalation in tensions. In Mexico, against whom U.S. President Donald Trump is threatening to impose tariffs if it doesn’t curb illegal migration, Cantera said the Santander is positive about its long-term prospects.
“We are a bank so we are highly correlated with the economies where we operate, so to the extent that trade wars affect the economy we are going to be affected,” Cantera said. “However, we have a very well diversified portfolio of businesses, we operate in many different countries, and the economies, particularly in emerging markets are doing extremely well so we think the effect is going to be really minor at this stage.”
The lender’s plan to buy back the remaining stake in its Mexican unit it doesn’t already own is on track to be completed in September, Cantera said.
