Santander’s secret: to conquer the world, stay like a small-town bank

Four years ago, I wrote that I knew no dark rumours about Santander, the rising force in UK high street banking, but that history taught me banks which expand rapidly and globally ‘always come unstuck in the end… partly because the challenge of risk control across such vast portfolios becomes impossible… Banks that have been driven by one powerful personality also tend to lose management grip, and start finding skeletons in cupboards, as the big man comes to the end of his tenure.’ The big man in question was third-generation chairman Emilio Botín — who died in post last week, aged 79. Santander is now Europe’s largest financial group, but despite years of economic turmoil and real-estate bust in its Spanish home market, and despite my own forebodings, it still looks pretty strong. So what was Emilio’s secret?

The answer, I suspect, was a combination of simplicity, technology, and team spirit — three factors that have proved sadly deficient in many other big banks. Botín’s principles were those of the old-fashioned small-town banker he was born to be: ‘If you don’t know your customers very well, don’t lend them any money.’ But his bank’s computers were anything but old-fashioned — and Santander pulled out of buying a bundle of RBS branches largely because the systems put in by Fred Goodwin were so poor it was impossible to ensure ‘a seamless journey’ for customers. As for esprit de corps, one associate told me: ‘Emilio was entirely devoted to the bank. He thrived on work and expected those around him to do the same. When you were with him, you had the sense that he was sizing you up: is this person any good? Is he committed? If the answers were yes, you were fine. His own commitment and loyalty inspired fierce loyalty in return.