THE GLOBALIZATION OF BANCO SANTANDER

Banco Santander was founded in 1857 in the port city of Santander, Cantabria, a relatively
remote area of northern Spain. At that time, the small family bank focused on the needs of the
local community and the growing trade generated by the city’s port. Today, Banco Santander is
one of the largest banks in the world with a market cap of aprox. $100 billion and extensive
operations in Europe, Latin America, Hong Kong, Singapore, Africa and the United States. What
is most impressive, however, is that much of this expansion occurred since 1999,
demonstrating the many forces at work within an increasingly global environment.

The company’s dynamic growth is in part a result of a visionary chief executive officer (CEO)
who believed in an aggressive acquisition model to expand the business globally. Coming from
the original founding family, Emilio Botín, then CEO and chairman of the Board, put Banco
Santander on a growth path of increasingly complex and sophisticated acquisitions. This
strategy has been fostered by her daughter and current Chairwoman of Banco Santander from
2014, Mrs. Ana Botín.

The bank’s buying spree began domestically and quickly went global. In 1999 Banco Santander
merged with Banco Central Hispano, another Spanish bank. In 2000 it acquired Banespa, the
fourth largest bank in Brasil. That same year, Santander took over Grupo Serfín in Mexico and
Banco Santiago in Chile. In 2004 the bank expanded into the United Kingdom with the
purchase of Abbey National. In 2005 it initially acquired 20 percent of Sovereing Bank in the
United States and in 2010 acquired the remaining shares. In 2007 Santander formed a
consortium with the Royal Bank of Scotland and Fortis to launch a take-over bid for ABN Amro,
through which the bank acquired Banco Real in Brazil, doubling its presence in the country. By
2008 the bank had also acquired Alliance/ Leicester and Bradford and Bingley in the United
Kingdom. In 2009, Banco Santander Brasil closed the world’s largest initial public offering (IPO)
during the global economic downturn and the largest in Brazilian historian at US$8 billion.

In 2011, the retail banking business of the Scandinavian SEB group was acquired in Germany
through Santander Consumer AG, and Polish bank Bank Zachodni WBK was also purchased. In
early 2013, Santander’s Polish subsidiary merged with Kredyt Bank, and Zachodni became the
third Polish bank in terms of branches, deposits, and credit. Also in 2017, Santander acquired
business from Deutsche Bank in Poland.

Although the bank’s expansion may be viewed geographically –that is, the establishment of
operation in various countries- the growth can also viewed from a linguistic and cultural
perspective. Each acquisition grew in complexity both in size and difficulty. Perhaps because of
its seafaring traits, or because of its origins in Europe, Banco Santander recognized that if it
were going to expand its reach, it would have to acquire the ability to do business not only in
Spanish, but English, and more recently in Madarin. By means of those acquisitions, and its
expansion into Asia, Banco Santander is seeking to leverage the growing trade between Asia
and Latin America as the world becomes more interdependent.
For example, to take advantage of the growing Latin America/ Asia trade, Santander Asia-
Pacifico was established. In January 2008 Santander opened its first Asian branch in Hong
Kong. Since then it has expanded with branches and representative offices into Shanghai,
Beijing, Tokyo, Seoul and Sydney. By expanding in this manner, the bank has also acquired the
ability to work and transact business in the three most active commercial languages in the
world.

In this regard, the globalization of Banco Santander reflects the internalization of knowledge
and the diversification of risk. By diversifying, Banco Santander is also mitigating its domestic
and regional risk. As it sought to expand into the various regions of the world, Banco
Santander has evolved its corporate culture to provide its customer the multitude of financial
products they require to do business in a global environment.

Banco Santander is still undergoing much change as it seeks to adapt what was once its
Spanish tradition to a more cosmopolitan, digital and diversified global force. Its global
appetite for growth continues in this new era; the 162-year-old bank is seriously promoting the
digitalization (Santander’s digital bank – Openbank - is the first fully digital bank in Spain), as
well as strengthening its leadership in Spain and Portugal, through the acquisition of Banco
Popular.

It will be interesting to watch how the Spanish bank grows as a global and digital entity. Such a
strong appetite for expansion requires a significant amount for digestion. Is Santander truly
Simple, Personal and Fair?

***

Source: Adaptation from Global Business Today McGraw-Hill 8th Edition