2023-09-18 22:26:25
Santander Bank has decided restructure its retail and commercial banking and consumer finance segments to divide your entire business into five global areas, as reported this Monday in a statement. Until now, Santander operated with a double division of its business at a local and global level. With the reorganization commercial banking gains weight. Until now, its primary segments were Europe, North America, South America and Digital Consumer Bank, while secondary segments were commercial banking, investment banking, wealth management and payments. With the creation of a global commercial unit, the bank believes that it will achieve “the strategic objectives set” and “increase the number of customers by 40 million by 2025increase the return on tangible equity (RoTE) to 15-17% and achieve double-digit growth on an annual average in the sum of the tangible book value (TNAV) per share plus the dividend per share throughout the cycle.
As of January 2024, Banco Santander’s business will be structured into five global areas: Retail & Commercial, Digital Consumer Bank, Payments, Corporate & Investment Banking and Wealth Management & Insurance. “We are convinced that this will be positive for clients and will also allow us to progress more quickly and meet all the objectives we set for ourselves at this year’s Investor Day,” said the president of Banco Santander, Ana Botín.
The financial institution plans that between 2023 and 2025, its CET1 capital ratio will exceed 12% and that the payout to shareholders will reach 50% of profits, including share buybacks and dividends, and that the efficiency reaches 42% by 2025.
The main engine
The idea is that the group will continue to offer detailed information on countries and regions, although it will do so as secondary segments, as indicated by Santander. In any case, commercial banking is the main driver of the bank’s profits and clearly gains prominence with the restructuring. The objective is to promote the capture of private savings in Spain and in the world, imitating the latest successes in the United Kingdom. Traditional banking activity generated a result of 3,269 million in the first half, 18.6% less, with income growing at 6.3% and expenses rising by 7%. With this reorganization it is anticipated that global profitability levels will increase by encompassing the peculiarities of each market in a single account. Behind commercial banking, investment banking contributed 1,876 million, 22% more, while private banking, insurance and asset management achieved profits of 819 million, with a growth of 70%.
Of the five new segments, two are already global businesses: the investment banking area, led by José Linares, and the asset management branch, headed by Víctor Matarranz. Of the new segments, Retail & Commercial will integrate the entire retail and commercial banking business of group companies and will be led by Daniel Barriusowhile Digital Consumer Bank will bring together the entire consumer financing business in the world and will be managed by José Luis de Mora.
Barriuso at the head of commercial banking
Barriuso is senior executive vice president of Santander and until now was the group’s Transformation director. Previously, he was Global Head of Cybersecurity (CISO) and Bank Fraud Prevention for almost seven years. He has three decades of experience in the banking, energy and technology sectors. Before joining Santander, he held various management positions at BP, Credit Suisse and ABN Amro. De Mora is senior executive vice president and until now was CEO of Santander Consumer Finance. He will now become global head of Digital Consumer Bank and will also be responsible for Corporate Development and Financial Planning of the group. He joined the bank in 2003 and has participated in the bank’s main acquisitions of financial entities in Europe and America.
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Before joining the group, De Mora had worked at Kleinwort Benson and Merrill Lynch in London. For its part, Payments remains a global business divided into two segments: PagoNxt, led by Javier San Félix, and Global Cards, led by Matías Sánchez. Under this new structure, global managers will define the common operating and business model, based on global platforms, while country managers will lead business management.
The group will adapt the way in which it reports financial results to the new model starting in January 2024, when it will be fully implemented, given that the five global businesses will become the main segments of the group. To facilitate year-on-year comparisons and analysis, the bank will publish information adapted to the new segments before the announcement of 2023 results, scheduled for January 31, 2024. The group will continue to offer detailed information on countries and regions, although it will will do as secondary segments. europe press
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