International -- Cover Story: Special Report
A RISING STAR IN SPAIN (int'l edition)
Sipping mineral water in a conference room at the Madrid headquarters of Banco Santander, Ana Patricia Botin seems unfazed by the wave of takeovers sweeping Europe's investment banking business. Says the 34-year-old chief executive of Santander's investment bank: "While I'm here, the chances of our acquiring something will be very small. We want to have our own culture."
It's no wonder Botin wants to keep intact the atmosphere she has helped create. In just six years, the family-run Santander, with $123 billion in assets, has developed into one of Europe's most eye-catching international investment banks. The buildup is especially apparent in Latin America, where Santander is betting that it can outrun even the global goliaths on Wall Street. Santander's aggressive strategy illustrates the new confidence with which European banks are confronting competitors on both sides of the Atlantic.
As an investment bank, Santander is still not in the same league as Morgan Stanley & Co. or Deutsche Bank. Its worldwide staff totals 1,200--the same number that megarival SBC Warburg employs to cover the U.S. market alone. But on her turf and in Latin America, Botin, who represents the fourth generation in her family to hold a top position at Santander, is proving that size isn't everything.
CRASH COURSE. To overcome the limitations of a small domestic market, Botin is building on Banco Santander's solid capital base and 30-year commercial banking presence in Latin America, where it is the largest international lender in key markets such as Chile. Botin's transatlantic Latin network boasts an asset-management business that has grown more than 25% annually over the past three years. She has lured rising young Latin bankers from Citibank, Bankers Trust, and other rivals. What's more, the Federal Reserve recently gave Santander's cross-border strategy a push by authorizing it to offer a full range of investment banking services in the U.S. That will allow the bank to underwrite American depositary receipts issues for Latin companies on Wall Street.
The Mexican peso crash last December highlighted Banco Santander's regional advantages. A month earlier, Santander had opened seven branches in Mexico to serve private banking clients and companies looking to expand. Santander not only stuck by its clients while some competitors panicked, but also, as an international bank with a strong credit rating, cashed in when Mexican investors sought safe havens for their deposits.
As a result, in the first quarter of 1995, Santander's Mexican subsidiary was the most profitable bank in the country. Then in June, Botin led Mexico's return to the capital markets with a $300 million offering for Mexico's foreign commerce bank, Bancomext. The bold underwriting move can only boost Santander's standing with the government in winning future deals.
Botin's efforts to build close ties to Latin American businesses have also paid off. In Chile, Santander has snared a $27 million bond issue for jam and juice producer Watt's Alimentos, and it is lead-managing a $150 million one-year Eurobond for Brazil's Banco Bradesco. When Latin American debt and equity offerings dried up after Mexico crashed, Botin was able to shift out of underwriting to more traditional bank business, such as trade finance and direct lending for corporate clients, many in Argentina. That generated about $1 billion in Latin American transactions in this year's first half. "We understand the volatility in these markets," says Botin. "If you're not flexible, you can spend one to two years doing very little business."
Some of Botin's success seems bred in the bone. Her father, Emilio, is Santander's chairman. His daughter may well succeed him someday. Meanwhile, she recently opened a bank in the Philippines with $50 million in capital and added staff to its Hong Kong and New York offices. As her young team of bankers grows up with the next generation of Latin movers and shakers, she has plenty of time to prove that a homegrown international investment bank can thrive, even in the land of the giants.
Ana Patricia Botin
Born Santander, Spain
Education BA, 1981, Harvard College, via Bryn Mawr College
Career history J.P. Morgan & Co., New York and Madrid, 1981-88. Treasury operations, foreign exchange, LDC debt. Joined Santander in 1988; took over investment banking in 1989
Family Married to Guillermo Morenes, Santander's head of international private banking. Three children. Father, Emilio Botin, is chairman of Santander. Mother, Paloma O'Shea, is a musician
DATA: BUSINESS WEEKBy Bill Javetski in Madrid, with bureau reports