Santander Brasil Sidebar:
Meet the Parent
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Behind all the headlines of Banco Santander (Brasil) SA’s (BSBR) $8 billion blockbuster IPO sits Banco Santander SA (STD), the bank’s parent company and a quiet giant in global banking. With a history dating back to 1857, Banco Santander has grown from a small domestic player in Spain to the largest bank in the eurozone (with a market value of $115 billion) and one of the most profitable in the world, according to Mauro Guillén, director of the Joseph H. Lauder Institute of Management and International Studies at the University of Pennsylvania’s Wharton School and co-author of Building A Global Bank: The Transformation of Banco Santander (2008).
Executive Chairman Emilio Botín, who took over the top spot from his father in 1986 to continue the family tradition of running the bank for a third generation, has built Santander through shrewd acquisitions and disciplined management, say banking experts. In 1994 the bank acquired rival Banesto in its home country, making Santander the biggest bank in Spain. According to Guillén’s book, Botín revealed his global ambition at the time of the deal by saying, “We knew if we wanted to be an international player, we needed to be the No. 1 bank in our home market.” During the next 20 years, Santander spent more than $60 billion acquiring other banks in Spain, as well as in Latin America and Europe. In 2006 it bought 25 percent of Sovereign Bancorp in the U.S. for $3.3 billion, and it scooped up the remaining 75 percent stake for $1.9 billion in 2009. Says Guillén: “There’s no question Santander’s intention is to grow its business in the U.S.”
After making an acquisition, the company fortifies its purchase with proprietary software that enables better customer service and reduces risk. “Santander’s IT system isn’t a way to reduce paperwork,” says Guillén. “It’s a way to get good information on customers and historical data on payments. That’s how it manages risk.”
