Santander facing UK difficulties after Brexit vote

One of the world's largest retail banks, Santander has long looked to its operations in the UK as being a safe, profitable number in comparison to its other units in Europe and South America.

Analysts have cut expectations for the bank's future earnings in the wake of Brexit, despite being less vulnerable to market volatility than most investment banks will be.

The pound has suffered a significant loss since the referendum, sparking fears that many businesses will be less profitable to those operating within Britain.

“The worse things go in the U.K., the worse it will be for Santander—that’s just inevitable,” said Daragh Quinn, an analyst at Keefe, Bruyette & Woods in Madrid.

A continued decline in sterling would decrease Santander’s U.K. earnings when the bank reports them in euros. The economic slowdown that many expect in Britain is likely to hit the revenue the bank makes selling mortgages and other products.

Executive Chair Ana Botín is currently encountering difficulties in other regions, such as in Brazil, where they face a prolonged economic recession, and in spain, where slow loan growth has hit hard.

Santander shares have fallen about 16% since voter support for Brexit was announced on Friday, June 24, frustrating Ms. Botín’s nearly two-year bid to boost the bank’s stock price. The company have declared that they are maintaining previous growth forecasts however.

“All commercial and financial targets for this year are reiterated,” Santander said in a regulatory filing.