Awards for Excellence 2020
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With lockdowns shuttering businesses across the continent, commitment to banking small and medium-sized enterprises has taken on even greater economic and social importance this year.
Euromoney’s best bank for SMEs in Western Europe, Banco Santander, has tackled this challenge head on, reflecting its increased focus on banking smaller businesses in recent years.
Its position in SMEs in Europe today partly reflects its 2017 purchase of Banco Popular, which gave it the biggest market share in Spanish SMEs. But the focus is also appropriate in an era of ultra-low and negative rates, with wafer-thin margins in corporate banking and retail mortgages.
Even before Covid-19, Santander, led by Ana Botín, was putting in more effort than most of its peers to developing its SME business, especially in Europe. The range of new SME banking initiatives at Santander over the last year is indeed outstanding.
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Ana Botín |
In Spain, it launched a digital invoice financing service, Financia&Go, and backed Tresmares Capital, an independent private equity and debt provider that works alongside the bank’s network. In the UK, it invested £350 million in trade and foreign exchange fintech Ebury.
It also bought a majority stake in Mercury TFS, which specializes in trade-finance software.
The year also saw the official launch of the Trade Club Alliance, a global banking partnership modelled on airline alliances that Santander has led. It signed an SME referral agreement with Crédit Agricole, leveraging the lack of geographic overlap between the two groups.
Santander also developed its global merchant acquiring business with the aim of bringing more banks onto that platform in Europe.
As the coronavirus struck in March, Santander launched a €20 billion Spanish SME liquidity fund at its own risk. It then conducted more than 60,000 transactions worth €9.6 billion in the first weeks of the Spanish state-guaranteed loans scheme, most of it going to SMEs.
Santander also took 36% of the first tranche of Portugal’s loan guarantee scheme, markedly higher than its overall share of SME loans in Portugal.
