Santander, one of Spain’s leading financial institutions, has unveiled a strategic move aimed at enhancing its performance and expanding its customer base. The bank announced its plans to consolidate its retail, commercial, and consumer activities across all markets under two newly established global business units. This restructuring initiative is designed to drive efficiency, improve performance, and ultimately achieve the strategic objectives outlined during its Investor Day presentation in February.
The two new global business units are:
1. Retail and Commercial Unit:
This unit will oversee Santander’s retail and commercial banking operations. It is tasked with enhancing the bank’s retail offerings, improving customer service, and driving growth in the commercial banking segment. Leading this unit is Daniel Barriuso.
2. Digital Consumer Bank:
This unit is dedicated to digital banking and serving consumers in an increasingly online and tech-driven landscape. Its mission is to leverage digital innovations to provide seamless and customer-centric banking experiences. Jose Luis de Mora will lead this unit.
These two new units will complement Santander’s existing global operations in Corporate and Investment Banking, Wealth Management and Insurance, Payments, and more. By consolidating its operations under these distinct areas, Santander aims to streamline its focus and deliver more targeted solutions to its customers.
The bank’s strategic restructuring comes with ambitious targets. While specific cost savings were not disclosed, Santander aims to achieve the goals outlined during its Investor Day presentation. These objectives include adding 40 million customers to its roster by 2025 and increasing its return on tangible equity (ROTE) to a range of 15-17%.
Santander’s Chairman, Ana Botin, expressed confidence that this restructuring will enable the bank to not only meet but exceed these targets. She highlighted the opportunity for achieving “consistent double-digit annual growth in tangible net asset value alongside increased dividend per share over the economic cycles.”
The bank’s timing for this strategic overhaul appears opportune, as it is currently benefiting from higher interest rates in Europe. Santander seeks to expand its investment banking business and capitalize on these favorable conditions.
Under this new model, Santander’s global heads will collaborate to define common business and operating models based on global platforms. The bank aims to align all its operations under five global business areas:
1. Retail and Commercial: Led by Daniel Barriuso.
2. Digital Consumer Bank:Led by Jose Luis de Mora.
3. Payments (PagoNxt):Headed by Javier San Felix.
4. Global Cards: Led by Matias Sanchez.
5. Corporate & Investment Banking: Continuing under the leadership of Jose M. Linares.
6. Wealth Management and Insurance: Remaining under the leadership of Victor Matarranz.
This restructuring represents a significant shift in how Santander operates and organizes its businesses. It aims to drive greater efficiency, improve customer experiences, and ultimately deliver better financial results. Beginning in January, Santander will report its financial results under this new organizational model, marking a new chapter in the bank’s strategic evolution.
In summary, Santander’s move to consolidate its retail, commercial, and consumer activities under two new global business units is a strategic response to evolving market dynamics. The bank is positioning itself for growth, efficiency, and enhanced customer service while pursuing ambitious targets outlined during its Investor Day. As it adapts to the changing financial landscape and capitalizes on favorable conditions, Santander aims to deliver value to its customers and shareholders alike.