The chairman of family-owned Banco Santander, Emilio Botín, has given a fascinating insight into how he runs one of the largest and most profitable banks in Europe. Botín (right), whose family have led the bank since 1857, took over from his father as president in 1986.
Describing the current credit crunch as "probably the most difficult times seen by a whole generation of bankers," Botin nevertheless predicted his company would exceed €10 billion in profit this year.
"The traditional caution of Banco Santander in risk management has enabled us to avoid the losses that many big banks around the world have had," he said. "We have always maintained a low and predictable risk profile and we turn down many transactions that may be profitable but don't fit with our risk policy."
In particular, he revealed the bank has not had to make any kind of special provisions related to securities linked with the subprime housing market or products affected by the international financial situation.
Botin also highlighted the importance of the corporate governance to the group, stating that "experience, decision-making procedures, internal control and independent risk management are all essential."
He described Santander's board of directors as "excellent" and "unique", and made a special mention of "two factors that constitute a solid guarantee for our future": the Santander brand, which he described as the "banner and substance of global differentiation," and the "quality and professionalism" of the management team.
He emphasised four priority fronts for management:
- To use technology to continue improving the efficiency of the businesses.
- To seize the opportunities to optimise Santander's position as a global bank and extend best practices throughout the group, so that the whole is worth more than its parts.
- To maintain strict control over risks.
- And to continue to improve customer service.
"I have full confidence in our performance in these four fronts, which is why I am optimistic about the performance of Banco Santander," he said.
Joachim Schwass: To sell or not to sell?