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Santander ups investment banking ambitions

‘Our European clients want to see European banks with them’


Pete Carvill

Spanish banking giant Santander has signalled its intentions to become a major player in the European investment banking space.

In a Financial Times piece published on Sunday, José María Linares, senior executive vice-president and global head of CIB at Santander, said that the institution had ambitions to become one of the leading European investment banks.

Linares admitted in the interview that Santander is currently a second or third tier investment bank.

He added: “Europe has to have a strong, healthy banking system, no shred of a doubt. It is obviously good that Americans can provide a competitive offer, but I think that especially our European clients want to see European banks with them.”

From retail to investment

Santander has already made some progress in this goal, according to the Financial Times’s reporting. In 2020, it was the largest provider around the world of project finance, up from eighth position in 2018. Bloomberg data also suggests that it is the fifth-largest player in European investment-grade debt capital markets this year, up from sixteenth in 2018.

The news that Santander is aiming to become a major investment banking player within Europe comes after the institution, largely seen as a retail banker, has seen a rocky few years, with 2020 seeing it report its first-ever annual loss.

Now, it seems to be heading in a new direction. According to the Financial Times, investment banking activity accounted for 15% of revenues in Q1 2021, along with 28% of its pre-tax profits.

The move to increase its investment banking business is reported to have been one of the tenets of Andrea Orcel’s 10-point plan when he was in the running to take over as chief executive.

However, that offer was rescinded in a dispute about pay conditions and has since resulted in a court battle in Spain. A hearing due to take place last Thursday was postponed due to the court saying that all those testifying could not do so remotely on the same day. Reuters reported that the hearing could be delayed by another six months.

Expert Investor has reached out to Santander for comment.