Spain

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It is hard to argue against Grupo Santander and its two domestic banking operations, Santander and Banesto, as winner of the best bank in Spain award. Last year its net profit was not only the highest ever reported by a Spanish company, but more than that of its bank and savings bank competitors combined. Although much of the bank’s growth has come from foreign acquisitions, including Abbey in the UK, the bank has never dropped the ball in its home market, where it continues to set the pace in innovation and in exploiting its scale to offer ruthlessly competitive pricing. Last year, for example, the bank’s Banesto subsidiary introduced 0% interest credit to SMEs borrowing to improve their technology, a move that attracted 14,000 customers.

Other popular innovations include the bank’s Real Madrid-Banesto Visa card, which gives holders up to two euros for every goal scored by Real Madrid in the Spanish league and nine months’ interest-free finance for the club’s season ticket. The innovative partnership has already attracted 40,000 new users. Santander also launched a 40-year mortgage that resulted in €11.5 billion in new loans being advanced to customers in 2005.

Calyon led more bond deals in Spain last year than any other bank. The market was dominated by covered bond and asset-backed deals and Calyon was a leader in the field. Calyon was also a big league table climber and seems to have real momentum in Spain where it also managed to avoid some of the poorly executed transactions that dogged some of its competitors.

Morgan Stanley led three of the biggest ECM deals in Spain last year, more than any of its competitors. The firm was sole bookrunner on the largest IPO of the year, a $187 million deal for Corporacion Dermoestetica, and on Spanish real estate company Metrovacesa’s €1.8 billion secondary placement, the second largest deal of the year.

Spain’s M&A market was among the hottest in Europe last year. Endesa took centre stage as it sought to fend off hostile approaches from domestic rival Gas Natural and E.ON of Germany. The deals, both valued at more than $50 billion, are the largest M&A attempts in Spanish history. Every bank worth its salt is claiming some role on the Endesa deal but Merrill Lynch is one of the few that is actually playing a significant part. Merrill Lynch’s list of mandates in Spain is full of impressive deals. It was sole adviser to the shareholders of Auna, Endesa, BSCH and Unión Fenosa on the separation and sale of Auna Group into Auna Telecom and Amena, which together fetched a total of $13.5 billion in a landmark dual-track process.