Banco Santander has grown from a regional player into the largest retail bank in Spain and a formidable force among European banks but some things never change. Emilio Botín’s highly personalized style of management is one of them. The sudden resignation last month of his respected CEO, Angel Corcóstegui, has given Botín a free rein as Santander Central Hispano’s executive chairman to tighten the dynastic grip over the banking group. In a move that surely lines her up for the future top spot, Botín has brought his daughter, Ana Patricia, back into the frame, appointing her chairman of Banesto (Banco Español de Crédito), the medium-size retail bank bought by Santander in 1994. Emilio’s brother Jaime, chairman of Bankinter, a rival bank, was also named first vice-chairman of SCH and Ana Patricia’s brother “little Emilio” already has a seat on the board.
This certainly looks like nepotism. Ana Patricia, an investment banker by training, has always been expected to take over the Botín family business eventually. However, she was forced to resign from the newly merged Banco Santander Central Hispano in 1999 because of an article in the Spanish press portraying a power struggle between her and Corcóstegui – who came from the Central Hispano side – which she lost.
She has since been pursuing a solo career in internet start-ups – which have failed. Emilio Botín sacrificed his daughter for the sake of the merger “between equals” but with Corcóstegui out of the way it made perfect sense for him to bring Ana Patricia back in. SCH, however, rejects this simplistic view of her return. “Of the 16 directors the only member of the family is Ana Patricia,” says an SCH director. “She is young, brilliant, dynamic, experienced, successful and an obvious choice to head Banesto. Such people are hard to find.”
Three years on from a difficult merger with Banco Central Hispano, a smaller Spanish bank with a very different culture, the aggressive and flexible, family-run Santander model has emerged victorious thanks to Botín’s strength and charismatic style as a leader but most of all his results. With hindsight it is clear that sharing power was never his forte, regardless of how big the bank had grown or how farsighted its ambitions.
And after co-chairman José Maria Amusátegui’s early retirement in 2001 it was only a matter of time before his protégé Corcóstegui chose to step out of the way too. But SCH is keen to dispel suggestions that Botín’s style is in any way dictatorial. “Emilio Botín has absolutely no problem in delegating management of the bank,” says a bank spokesman. “That’s why he chooses the best people to surround him, and Ana Patricia is one of them. He is absolutely professional in this. He values the best; that is unquestionable.”
Corcóstegui’s departure from Santander Central Hispano should have been expected. His position was often undermined by Santander executives, say SCH sources, and he’d been reportedly upset by the decision to have general manager of the Americas division, Francisco Luzon, report directly to the chairman. This, Corcóstegui felt, would reduce his overall power.
Reporting only to Botín after Amusátegui’s departure, Corcóstegui must have had a pretty rough time of it trying to concentrate on longer-term goals such as rigorous cost control, while those around him bickered over post-merger structure. In the end he had had enough. “Angel Corcóstegui’s departure was absolutely voluntary. After 14 years of bank mergers, with the SCH merger now complete, he decided to leave, waiting until the end of the financial year which he said was ‘his duty’,” says an SCH director.
To replace the coolly dynamic Corcóstegui, Botín has moved over Alfredo Sáenz from Banesto. Sáenz was CEO and vice-president at Banco Bilbao Vizcaya before the merger with Argentaria in the late 1980s but was brought in as president to refloat ailing Banesto in 1993 after the Bank of Spain intervened. In addition, to reinforce SCH’s Latin American project, Luzon – who was chairman and CEO at Argentaria before 1996 when he moved to Santander – has been given a seat on the executive commission.
With the promotion of these two bankers within the group, SCH representatives are keen to impress on foreign investors that although Emilio’s Botín’s management style is very personal, it’s also highly meritocratic. “Emilio Botín has given greater power to Alfredo Sáenz and Fransisco Luzón – two of the most valued bankers in the group – and not to his family; in fact totally the contrary. Jaime Botín has left the executive commission, so he has less power,” says a bank source. Neither Sáenz nor Luzon, “two of the most prestigious, prominent bankers in Spain”, according to the source, come from the Santander stable.
There is no doubt either about Ana Patricia’s credentials, although her forte is clearly not in domestic retail banking. She started her career at JP Morgan at the age of 20 and in 1988 joined Banco Santander as head of the banking division for capital markets in the international division.
A year later she was on the Santander board and a member of the executive committee and was then appointed co-general manager of Santander and later executive vice-president. Ana Patricia has a passion for Latin America and was at the forefront of the expansion of Santander Investment and Banco Santander into the region in the late 1990s, which included the acquisition of Santander Mexicano, Banco Río de la Plata, Banco Santander Colombia, Banco Noroeste and Banco de Venezuela.
In February of 1999 she resigned from her executive functions in the newly merged BSCH and began her career as a venture capitalist and then as a business consultant. Her appointment at Banesto makes her the first woman to hold such a high position in Spanish banking. Little is expected to change at Banesto under its new leader. Ana Patricia will keep the present team and pursue her father’s objective to make Banesto the third-largest bank in Spain by profits.
Analysts expect things to settle down at SCH now that Emilio Botín has established how he intends to run things. Despite heavy criticism, Botín’s hands-on management style has been accepted by his colleagues because the bank continues to produce excellent results. In this there would seem to be no room for personal prejudice. “Botín wants the best managers not just people he can push around, and he gets rid of those who don’t perform, wherever they come from,” explains one analyst. The markets seemed happy with the chairman’s appointments: on the day SCH shares closed up 0.7% at e8.82.
