By Katie Llanos-Small
Emilio Botín: No home advantage
Latin America will continue to bolster Spain’s Banco Santander, as it has already for over two decades, says its chairman Emilio Botín
At its height in 2012, Spain's financial crisis prompted a $50
billion EU-led bailout of the country's banking sector. Amid
the chaos, it was hard to find any positive news for or about
Spanish lenders, a handful of which went bust.
The two largest, BBVA and Banco Santander, however, had
something their peers lacked: a global reach which had
succeeded in keeping them profitable, even while they were
forced to scale back on their international operations.
Banco Santander traces its origins in Latin America to the
1950s, when it opened offices in Argentina, Cuba, Mexico and
Venezuela. Its first Latin acquisition was Banco El Hogar
Argentino, which it bought in 1963, and over the following
decades it deepened its engagement by picking up local lenders
in the Dominican Republic, Ecuador, and Costa Rica among other
In the mid-1990s, Santander launched an aggressive
acquisition phase in Latin America. Led by its chairman Emilio
Botín, the Spanish lender picked up stakes in numerous
counterparts across the region. As the highest-profile
participant in a broader trend for global banks to acquire
Latin operations, Santander's expansion earned Botín
LatinFinance's Man of the Year award in 1998.
"Latin America has been one of the main drivers of growth
for Banco Santander for the last 20 years and I am sure it will
continue to be in the coming decades," Botín tells
LatinFinance, adding that he is "optimistic" about the outlook
for the region and its banks.
Growing populations increase the opportunities for banks in
the region, he says, noting that the combined population of
Mexico and Brazil - 317 million - is approaching that of the
eurozone, which has 331 million.
But other demographic shifts are playing a part.
Botín points to stronger economic resilience across the
region: more diversified exports, stronger internal markets,
better-balanced government budgets, and record-high
"Latin America has developed solid and stable political and
economic institutions," he says. "These in turn foster the
emergence of the middle classes, which are increasingly
accessing financial services."
Still, despite the opportunities available away from home,
Spain's banking crisis has pushed lenders to trim their
international holdings to boost capital ratios. Since 2011,
Santander has sold stakes in its Brazilian, Chilean and Mexican
subsidiaries, and dropped all of its Colombian assets. The sale
of a quarter of its Mexican unit through a $4.1 billion IPO was
the largest of its kind in that market.
Despite scaling down operations abruptly, there is little
question that Santander will continue its presence in Latin
The interplay between local and global banks in Latin
America is symbiotic, says Botín, describing it as a
"two-way street". Latin and Spanish banks can each learn from
best practice risk management, crisis prevention, and
commercial strategy, he says.
That's not to say the rivalries are not fierce. "Competition
in the region is high," he says. "Some of its banks are among
the best in the world." LF