Banco Santander, S.A.
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| Type |
Public (BMAD: SAN, LSE: BNC, NYSE: STD (ADR), Euronext: SANT, SANTA, BM&F Bovespa:SANB3, BVC: 37) |
| Founded |
1857 |
| Headquarters |
Santander, Spain |
| Area served |
Europe, Latin America, Singapore, Hong Kong, Africa, USA |
| Key people |
Emilio Botín (Chairman of the board), Alfredo Sáenz Abad (CEO) |
| Industry |
Financial services |
| Products |
Banking, insurance, asset management |
| Revenue |
€31.04 billion (2008)[1] |
| Operating income |
▲ €17.73 billion (2008)[1] |
| Profit |
▲ €8.876 billion (2008)[1] |
| Total assets |
€1,050 billion (2008)[1] |
| Total equity |
€63.77 billion (2008)[1] |
| Employees |
170,960 (2008)[1] |
| Website |
www.santander.com |
Headquarters in Santander
Grupo Santander (BMAD: SAN, LSE: BNC, NYSE: STD (ADR), Euronext: SANT, SANTA, BM&F Bovespa:SANB3) is a banking group centered on Banco Santander, the largest bank in the euro area (in terms of market capitalisation), which originated in Santander, Cantabria, Spain.
History
The 1999 merger of Banco Santander (founded in 1857) and Banco Central Hispano (founded in 1991) following the merger of Banco Central [est. 1919] and Banco Hispanoamericano [est. 1900]), created Banco Santander Central Hispano, or BSCH.[2]
The 1999 merger between Santander and Banco Central Hispano (BCH) was designed to be a "merger of equals" in which the top executives of the two pre-existing firms would share control of the merged entity. Soon after the merger former BCH executives accused Botin of trying to push his own agenda and threatened to take legal action against him. This post-merger squabbling was resolved when BCH executives Jose Amusategui and Angel Corcostegui agreed to accept severance payments, retire and renounce control to Mr. Botin, at an expense to shareholders of €164M.[3]
The large termination payouts generated negative press and Mr. Botin was eventually brought to trial on criminal charges of "misappropriation of funds" and "irresponsible management." However, in April, 2005 he was cleared of all charges. The verdict said the €164M retirement payments made to the two former executives were legal, "made as compensation for the services provided to the bank." In 2005 the anti-corruption division of the Spanish public prosecutor's office cleared Mr. Botin of all charges in a separate case in which he was accused of insider trading.[4]
On 26 July 2004 Banco Santander Central Hispano announced the acquisition of Abbey National plc. Following shareholders' approval at the EGMs of Abbey (95 per cent voted in favour, despite vocal opposition from most of those present) and Santander, the acquisition was formally approved by the courts and Abbey became part of Grupo Santander on 12 November 2004.[5]
In June 2006, Banco Santander Central Hispano purchased almost 20% of Sovereign Bank and acquired the option to buy the bank for $40 per share for one year beginning in the middle of 2008.[6]
In May 2007 Banco Santander Central Hispano announced that in conjunction with Royal Bank of Scotland and Fortis it would make an offer for ABN AMRO. BSCH's share of the offer added up to 28% and the offer would have to be made up of a capital increase through a new share issue. Then in October 2007 the consortium outbid Barclays and acquired ABN AMRO. As part of the deal, Grupo Santander acquired ABN AMRO's subsidiary in Brazil, Banco Real, and its subsidiary in Italy, Banca Antonveneta.[7]
On 13 August 2007, Banco Santander Central Hispano changed its legal name to Banco Santander.
In November 2007, it sold Banca Antonveneta to Monte dei Paschi di Siena. In March 2008, Banco Santander sold Interbanca, a subsidiary of Banca Antonveneta, to GE Commercial Finance, receiving in return GE Money businesses in Germany, Finland and Austria, and GE's Card and Auto Financing Businesses in the UK, which it will integrate into Santander Consumer Finance.[8]
The group announced in July 2008 that it intended to takeover the UK bank Alliance & Leicester, with £24bn in deposits and 254 branches.[9] The acquisition was completed in October 2008 when the group delisted the company's shares from the London Stock Exchange. This was followed by the acquisition of the savings business of UK bank Bradford & Bingley (B&B) in September 2008, with deposits of £22bn, 2.6m customers, 197 branches and 140 agencies.[10] The banks, along with Abbey, are to be merged together under the Santander name in the UK by the end of 2010.[11]
In October 2008, Grupo Santander announced that it would acquire the 75.65% of Sovereign Bancorp it does not currently own for approximately US$1.9 billion (€1.4 billion): the acquisition of Sovereign has given Santander its first retail bank in the mainland United States.[12]
Recent Legal Issues: In January, 2009 Spanish prosecutors initiated an investigation into the involvement of Santander and relatives of the company's chairman, Emilio Botin, in New York financier Bernard Madoff's alleged Ponzi scheme, which defrauded investors of over US$50B. Press sources have reported that Santander's clients' losses from Madoff investments are by far the largest reported at a single bank. Prosecutors have said they want to know the details of Santander's relationship with Mr. Madoff's firm. Investigators are seeking to determine if Santander executives knew about problems relating to the Madoff investments before the scandal became public.
Press sources have reported that individuals connected to Santander were among the most active of an international network of feeder funds that funneled clients' money into Madoff's alleged pyramid scheme. Santander was responsible for encouraging wealthy clients from all over Latin America and Europe to invest in Mr. Madoff's fund. While Santander clients lost €2.3B (US$3.1B) in investments with Madoff, Santander itself lost just €17M, which has also raised questions. Two of the funds that worked with Madoff were run by Santander chairman Emilio Botín's son Javier Botín-Sanz and son-in-law Guillermo Morenés.
Press sources also reported that Spain's anticorruption prosecutor will also investigate the relationships between Santander, the investment fund Fairfield Greenwich Group, and the Madoff funds, the prosecutor's office said. Investigators said they will pay particular attention to an instance where Mr. Botín sent his close associate Rodrigo Echenique, who formerly served as Santander's CEO and currently sits on the company's board, to see Mr. Madoff in New York just weeks before the scheme collapsed. A number of Santander clients are threatening to remove their remaining funds, and some have already taken steps to sue the bank for negligence, people familiar with the matter say. Santander has offered some private clients shares of its own preferred stock as compensation for Madoff-related losses. Press sources have reported that this initial compensation offer has not been popular with the banks' clients. In June 2009 Geneva's Public Prosecutor opened a criminal investigation into Santander's ties to Madoff. The investigation is ongoing and expected to take about two years.
Operations
In the wake of the current financial crisis it has become the largest bank in Europe,[13] replacing HSBC, which used to be the first in terms of market capitalization[14].
Grupo Santander has numerous operations in Latin America. It has rebranded most of the subsidiaries it has acquired to Santander.
Grupo Santander consists of 131,819 employees, 65.1 million customers, 11,178 branches and 2.27 million shareholders. Retail banking - the main aspect of Santander's operations - generates 82% of the group's profit.
Currently, Santander is a corporate sponsor of the McLaren-Mercedes Formula 1 team[15] and the Copa Libertadores de America.
On the 1st of December 2008, Santander announced that their Formula One sponsorship deal with McLaren will end in 2010, when Santander will become Ferrari's main sponsor. However, in September 2009, Santander announced that it will continue its sponsorship with Vodafone McLaren-Mercedes due to its brand awareness in the UK rising from 20 to 82 percent.[16]
On December 14, 2008, it was revealed that the collapse of Bernard Madoff's Ponzi scheme might mean the loss of 2.33 billion euros at Banco Santander.[17]
Global operations
European operations
- Bosnia and Herzegovina
- Nova Santander Banka d.o.o. Trebinje
- Denmark
- Santander Consumer Bank AS
- Germany
- Santander Consumer Bank AG - www.santander.de
- Santander Consumer Debit GmbH
- Santander Consumer Leasing GmbH
- Switzerland
- Santander Private Banking
Latin American operations
- Argentina
- Banco Santander Río (after acquisition of the local Banco Río by Santander)
- Mexico
- Banco Santander (from merger of Banco Mexicano, Banco Serfín and Santander)
Asian operations
- China
- Banco Santander, S.A. - Hong Kong Branch
- Banco Santander, S.A. - Shanghai Branch
African operations
North American operations
- USA
- Santander Private Banking
- Sovereign Bank
- Santander Consumer USA Inc.
- Santander Global Banking & Markets
See also
References
Notes
Sources
- Guillén, Mauro and Adrian Tschoegl (2008) Building a Global Bank: The Transformation of Banco Santander. (Princeton, NJ: Princeton University Press).
External links
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