Campden FB’s Family Business Leader of the Year 2008 came out fighting yesterday as he announced record financial results for Spain-based banking group Santander.
Chairman Emilio Botin has had a torrid start to the year as the bank his family has led since 1857admitted it had lost more than €2.3 billion of its clients' money with Bernard Madoff.
However, the bank has had its “best year in the last 20 years” with a net profit of €8.876 billion – not far off the €10 billion Botin predicted last June before the banking crisis really took hold.
“Santander faces the current situation from a position of strength and foresight,” said Botin. “We generate good results and, at the same time, we’ve been able to reinforce our competitive position for the future.”
He put the “very positive” results down to four factors: a sustained increase of revenues; tight control of costs, strong investment in technology and global management; risk management; and geographic diversification.
The choice of risk management is contentious given the group’s exposure to the collapse of Lehman Brothers and the Madoff Case, which cost the bank €450 million. Botin said Santander had been a victim like any other despite “having acted with all the necessary diligence.”
“I cannot hide my surprise [at Madoff]: it is incomprehensible that an institution subject to supervision as demanding as that of the US has been able to commit a fraud for so long and for so much,” he said.
Going forward, the 74-year-old foresees a “more concentrated and better supervised financial environment, with more public presence, where banks will tend to focus more on traditional business and markets will demand higher capital levels and more attention to risk.”