Ana Patricia Botín: The skills of the father

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Whatever criticisms may be made of Ana Patricia Botín, she certainly inherited her father's entrepreneurial talent. During her 10 years at Santander she pushed the investment bank forward at a hectic speed, recruiting top bankers and at one stage harbouring ambitions that it could become a global player. The emphasis was on emerging markets, however, and she firmly implanted the Santander Investment franchise in Latin America such that when the bank wanted to acquire retail banks in the region, experienced dealmakers were in position to negotiate for them. Ana Patricia didn't stop there. Her vision was to have a huge flow of emerging-market securities that could add to the Latin flow already going through the New York and London hubs to investors. She was expanding Santander into Mediterranean countries such as Egypt and Turkey and when the Asian investment bank Peregrine failed, she picked up a team of 130 equities specialists in February 1998. She also took on the running of the Latin American retail banks and headed the search for a bank in Portugal. In late 1997, when Santander Investment was merged into the commercial bank, she acquired responsibility for wholesale banking and treasury. The whole Santander dilemma is encapsulated in the successes and failures of Ana Patricia. Without her, BSCH would not be sitting on $85 billion of Latin American banking assets (more than twice BBVA's) and poised to earn $800 million from these operations in 2000. It was her focus on growth and the determined way she went about achieving it, totally characteristic of the Santander style, that put so many valuable assets into the BSCH basket. Sometimes the odds were formidable. Citibank had huge teams evaluating Banco Rio in Argentina and Noroeste in Brazil but it was Santander's much smaller staff that won the deals. By contrast with BBVA, which bought smaller stakes in bigger banks, Ana Patricia's approach was to go for majority control even if it meant going for a smaller player. Former colleagues describe Ana Patricia as "a pusher and a stretcher". One says: "If you gave her 10 she would ask for 11." At the investment bank she was regarded as a cool decision maker who maybe pushed both herself and the bank just a bit too far. "She is a good trader like her father," says another, "knows the Spanish banking system inside out and knows how to make money but was less able as a day-to-day manager. She was terribly weakened by the Peregrine Wasco." (Santander took on analysts from insolvent Asian broker Peregrine only to disband them later.) Ana Patricia's mistakes were to make rapid acquisitions without putting in place the necessary management structures. The investment bankers that did the deals were also those put in charge of running the acquired banks. This happened with António Horta Osorio in Brazil and Portugal which he now runs and Michel Goguikian in Venezuela. Though this did not cause problems because of their lack of knowledge of retail or other products - specialists from Spain were sent to help out where necessary - it weakened the investment banks as their chief deal-makers were now focused on other things. The hope that the commercial banks in Latin America would create a huge deal flow for the investment bank has not been fully realized. With the onset of the emerging-markets crisis in 1997 and 1998, Ana Patricia's operations were suddenly under the spotlight. Proprietary losses were small but Santander's share price was badly hit because the group was seen to be exposed to Latin America. Ironically, the merger of the investment bank into the commercial bank that analysts saw as Ana Patricia gaining a wider and more mainstream role on the way to the CEO's position proved part of her undoing. It gave her foes much greater insight into investment banking activities and thereby much of the ammunition they could use to criticize her.

A lot of fuss was made about Peregrine. In reality costs there were only $35 million and the investment could have started to pay off if Santander had held on a few months until the Asian crisis was over. But Peregrine came to be seen as an investment too far. "We were running ahead of ourselves at the investment bank. There was too much outlay on the future and insufficient exploiting of the present," says a former employee.