If I were to invest £10k in Santander shares at the start of 2024, this is what I would have now.

It's been a funny 2024 year so far Banco Santander (LSE: BNC) shares. They started the year at 329p and by May had reached 414p, a five-year high.

This made Santander the largest eurozone bank by market value (above BNP Paribas). Since then, however, the share price has recovered to 340p, representing a 3.3% rise.

This means that a £10,000 investment made at the beginning of January will now be worth £10,334 on paper. It would also be a dividend in May, taking my return of over £10,500.

Is that good? Not really, I would argue, especially if Lloyds' share price is up 15.7% year to date, while Barclays increased by 35.3%. Both also paid dividends.

In addition, the main list of Santander is in Madrid, where even BEX 35 (Spain's main index) increased by 5.7% in 2024. So it's also disappointing.

What was going on?

The Spanish bank has a diversified business model around the world. Its strong presence in Europe provides a stable capital base, while its growing presence in Latin America offers exciting growth opportunities.

However, in the past, Santander has been criticized by some shareholders for being hard-hearted about its dividend distribution. So in February 2023, it announced that it will increase the payout ratio (the portion of earnings distributed to shareholders) from 40% to 50%.

In line with this policy, it returned more than €5.5bn in dividends and share buybacks last year as net profit reached a record €11.1bn. In Q2, its net profit rose 20% year-on-year to €3.2bn thanks to strong results in Spain and Brazil.

It appears that the stock has fallen recently because investors are afraid that their strong net interest income (NII) numbers have risen too much. NII is the difference between interest earned on loans and that paid on deposits.

However, in the long term, I have hopes for the growth of the bank in Latin America. About 30% of people in Brazil and 50% in Mexico don't even have bank accounts yet. The opportunity is huge.

Yes, the region is safe. Usually there seems to be a major economy experiencing difficulties there, Argentina being the latest example. Such situations can increase loan defaults.

Should I invest?

I currently have two bank stocks in my portfolio. These are HSBC again Bank of Georgia, yielding 7.4% and 5.5%, respectively. By comparison, Santander's yield is just 4.1%, even after increasing the payout ratio.

That doesn't give me my eye, especially if a FTSE 100 The index fund offers a yield of 3.6% without taking stock-specific risk.

But what about that great growth opportunity in Latin America? However, one of my greatest assets MercadoLibre, a regional e-commerce leader. Its Mercado Pago fintech platform now has 52 million active users and in Q2 its assets under management grew 86% year-on-year to $6.6bn.

It has applied for a banking license in Mexico and wants to be the leading digital bank in the region. This puts it as a major competitor to traditional lenders such as Santander.

I am currently excited to gain exposure to the growth of financial services in Latin America through MercadoLibre.