Monday Profile: Banking dynasty's latest leader will be a tough act to follow

ONLY the foolhardy would attempt to call time on Emilio Botin's reign at Santander. But if the patriarch of the eurozone's largest bank was getting ready to step down, few could quibble over the success of his 24-year tenure.

He has emerged as the only winner from the audacious three-way bid to take over the global operations of Dutch lender ABN Amro in 2007. The contrasting fortunes of its erstwhile partners - Royal Bank of Scotland and Belgium's Fortis - was underlined last week when the Spanish bank extended its UK presence through the enforced sale of 318 RBS branches.

Santander will pick up nearly a quarter of a million small business customers as a result of the 1.65 billion deal, plus about 1.8 million retail clients, and its share of the small and medium-sized business banking sector will nearly treble to 8 per cent. In typically energetic fashion, Botin, 75, hailed the deal as a "giant step" forward for Santander in the UK, where it is set to become the fourth-largest branch network operator, jumping ahead of HSBC.

The focus now will be upon transforming the UK business - which also includes former operations of Bradford & Bingley, Alliance & Leicester and Abbey National - into a "universal" bank offering a range of products such as insurance, asset management and credit cards.

"They have a proven model in several countries around the world which they will replicate here," says Arturo de Frias, banking analyst with Evolution Securities in London.

The question is whether Santander will float part of its UK business on the London market to help pay for this transformational RBS deal - sources close to Santander indicating that the group would be hesitant to proceed unless there are signs of sustained economic recovery. Funding could otherwise be drawn from retained profits.

Whatever the outcome, investors will expect a shrewd move from Botin, arguably Spain's highest-profile corporate leader. If evidence of his nous was needed, it came in the way that Botin handled Santander's role in the ABN takeover. RBS and Fortis both borrowed heavily to finance the deal, leaving them exposed to the banking crisis that kicked off in the autumn of 2008. RBS was saved from collapse by the biggest government bail-out of any single banking institution; the operations of Fortis had to be broken up.

Santander, on the other hand, flipped former ABN subsidiary Banca Antonveneta of Italy for a quick profit that covered its costs. That left the group to focus on the high-growth Brazilian operations of Banco Real.

The third in his family to hold the Santander chairmanship, Emilio Botin-Sanz de Sautuola y Garcia de los Rios has spent most of his life crafting such deals in his quest to turn the business into a leading global player.

He joined the business in 1958 at the age of 24 as a low-level manager in the operation's oldest branch in Santander, the northern port town where the bank was founded in 1857. Botin spent nearly three decades under his father's tutelage before the latter eventually retired at the age of 84.

In 1986 - the year Botin took over from his father - Santander was ranked sixth of Spain's banks. The younger Botin then led a shake-up of the country's previously staid banking sector by introducing offers such as high-interest savings accounts and low-interest mortgages, helping to establish a more modern and competitive banking model for Spain.

The drive for growth began in earnest in 1993, when Botin led the acquisition of credit bank Banesto; 1999's "merger of equals" with Banco Central Hispano then created Spain's largest banking operation. In the midst of building its global presence, Santander entered the UK market in 2004 with the purchase of Abbey National.

The financial crisis of 2008 paved the way for the acquisition of Alliance & Leicester, quickly followed by a swoop on the more lucrative parts of distressed former building society Bradford & Bingley.

Santander has grown into one of the world's top banking organisations, having avoided much of the fall-out from the credit crisis. It recently passed its European regulatory stress tests with ease, while profits for the current financial year are expected to be in the region of 7.4bn. Much of the credit for this is attributed to Botin, known for his fierce control of the bank's decision-making.

However, as the years have advanced, there has been the inevitable speculation as to who might succeed such a forceful character in this pivotal role. The safe bet seems to be his eldest child, Ana Patricia Botin, 49, currently chairwoman of Santander's Banesto subsidiary.

Regardless of who takes over, there is no doubt the loosening of Botin's steely grip will have an impact on Santander. However, de Frias says the bank is entering a new stage in its evolution which would be more suited to a leader who can keep the business safe, rather than striking out in bold new directions.

"Santander will not be expanding at this pace forever," he said. "Most of what remains to be done now are bolt-on acquisitions - a lot of the critical decisions have already been taken by Botin. From now on, you need much more a control and execution sort of leader, rather than a visionary leader."

BACKGROUND

Born on 1 October, 1934, Emilio Botin de Sautuola Garcia de los Rios is from a long line of bankers, including his father, grandfather and great-grandfathers.

He studied law at the University of Valladolid, followed by an economics degree from the University of Deusto, Bilbao.

He joined Santander as a low-level manager in 1958 and spent nearly three decades under the tutelage of his father before the latter retired as chairman in 1986. Botin took over the role.

Botin's net worth was recently estimated at slightly more than 1 billion; much of it is from his roughly 2.1 per cent stake in Santander.

He is married to socialite Paloma O'Shea; the couple have six children.