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00:00And a button. Thank you so much for speaking to Bloomberg. Now alot of the focus is on climate change ahead of COP 26. What does banks what do you need from regulation now to do more forclimate change. So our big task as banks. I mean most of us are net zero in our own operations.And the big thing is how do we help our customers transition to green.So what we need we need first a common language. We call it taxonomy.So what is green. We need to ensure that stress tests are aligned across countries and regions. We also need governmentsto have policies that are common because otherwise you're going to have unintended consequences and you know others financingwith some and not financing. And so we do need that clarity and coordination hopefully across the world. So where we get it.If you look at some of the anxiousness in banks right now partly because of asset managers partly because people say well look ifyou have credits it doesn't really help with the root of the problem. How much more will be done in the next two months. WellI think there is I think Covid has helped us because we've realized that we depend on each other. And it's exactly the samefor climate change. And even though some people say you're not seeing it I meanextreme weather I mean you're seeing a lot of the signs that we are in a very dangerous path. And I so I think thatconsciousness that it has to happen now and it has to happen working together is very much with us in the private sectorbanks governments regulators. So there's a real push for coordination happening and for having clarity. What is green.How do you measure. What do we do about it. I mean the EU for example changed tosome of their metrics and saying some products are not labor should not be labeled green. And they were in the past where wesee a similar move from Asia the U.S. and others. Well that's a goal that we have I think with COP in Glasgow is that we havemore alignment on the global standards. And again we need to speak the same language. Otherwise it's not going to. It's notgoing to be done in the right way. My biggest concern is not leaving customers behind. We're seeingthat with the energy price increase. You know going green will have a cost but there's also a huge opportunity for business andinvestment. And so doing it in a way that we can bring along the morevulnerable customers the developing economies that are not starting in the same place as us. I mean in Brazil Mexico peopleneed a home not just a green home a home. And so how do we get this done in a fair way across different countries and sectors.That's the hardest thing for us. What has been the impact actually of energy costs on some of your customers.Is that one of the biggest things that we should worry about that we're underestimating the societal impact not onlyinflation. Well you know there's a lot of talk and this is linked to the big issue in financial markets today which isinflation which is is this a temporary issue. And I believe it is in the sense that you know Covid is a one off and it's sortof created a spike. But you know us China already ahead of where they work. Recall that Europe will be there in Q1.And so I do think energy is a factor but hopefully it's part of the broader picture of how do we green the economy added coststhat we can afford. And that is fair. And where the cost is borne by everybody in a fair way. And you have a great snapshotof the world because you have an overview of the emerging markets of the U.K. of Europe of the U.S. of Asia. What worriesyou about what we're living through at the moment economically. So first let me say the positive. You know we're in a muchbetter place than a year ago. You know 6 percent globally growth for this year or 4 percent for next year. That's IMF latestpredictions is actually pretty good. And so I think that is one thing. The other is of course governments especially in thedeveloped world were very much you know in a timely way making sure that businesses survive. And so I think those are verypositive signals. The other one is of course there's been a huge amount ofsavings. I mean Spain for example in 2020 increased savings by 110 billion.That's almost 10 percent of GDP on the risk side. You know what happens with the excess government debt.What happens when businesses and people are taking off life support. You know do they go back to being in a regularsituation and able to cope. You know it's inflation temporary. Those are the issues we need to tackle. And that could mean thatwe could see zombie companies are again. What are you hearing from clients like you as you travel aroundthe world. What should we be focused on and what should leaders be focusedon. Well you know the same issues as before. I mean I think one of the things we all have to manage and wewere already doing that is how do we approach customer behavior that is radically different. You know 50 year olds and you knowanybody above that age had a hard time banking on the. During Covid a lot of people have actually had to do it because theydidn't want to go out of their homes. And so you know how do we bring people along that digital transformation. How do we ensurethat you know everybody has a chance in the new economy. I think those are the big issues of responsibility of business.For us it's climate change and financial inclusion. Those are the two big areas we've decided to focus as a company. And Ithink each company has to choose where they want to have most of an impact.Over and above their business impact. Right. Creating jobs and serving customers. Right. From the start actually as a bigbanking chief executive you were one of the first ones to talk about digital transformation about finance. You know the fintechcompanies. How do you see Santander operating with fintech. CAC creating a lot inside. Would you be looking at buying. How doesit pan out in the next four years. No we're quite different from others in the sentence. You know we have in markets scale andglobal scale. And so our global scale is 150 million customers in 2019. I think with you here in London we said we'd beinvesting 20 billion over the next four years in technology to make that transformation. We very much believe we need and wehave decided to work along three verticals or three strategic priorities. One is what we call the one Santander. How do wemake a single global platform that is at the same time able to compete locally. Again 150 million customers across Europe inthe Americas. The other one is our panel next which is our global payments company. And then we have the digital consumerbank. So we're going to both do it inside the bank and also within an autonomous payments company that we believe can be oneof the top 10 15 global payment companies in the medium term. And this is what market share the global payments. Yes. Company.Yes. In terms of transaction volumes we for example in merchant acquiring would be around 10th in the world already. And we'reworking on three verticals which is merchants trade and consumer on consumer. And this is still within the banks.We have 60 million active cards. So we have the scale in terms of customers. Very important. What customers do with us paymentsand cards merchants. But also in terms of investment capacity.Again I would say now you know it's only down to execution. How does how do you see the syntax face actually changing in thenext five to six years. Is it payment the next big thing or is there something else that needs to be disrupted.I think the next big thing which is already here actually is crypto. So I think that is the it's already happening. You knowwe talk a lot about the CBD central bank digital currencies. The fact is you already have around 100 billion of stable goingdollars U.S. dollar fiat currency digital currency in the US today unregulated outside the system. And so how do we thinkabout that. There's a huge amount of innovation happening. And in an area that is very much systemic. It's about monetarypolicy and you know how that gets managed whether it's inside or outside the system. So how do you look at crypto and actually doyou have to be as a chief executive chairman you know a believer of crypto to be able to to. Right. You don't have the rightproducts for your customers. Well we are sort of a leader in crypto. We issued the first end to end bond on the block chainwhich is the technology behind crypto. We have a very very strong group. Not huge but strong group on that.And the big thing is how will central banks want to manage this. Will they manage to themselves. Will they create a framework andtell us how to do it. Will they do nothing. I think they will be working with us with the banks.And it's also what we want to play in that value chain right now. And I guess I mean how many customers actually want to buyBitcoin. Do they come to you or to your cash. Actually do. But we've been quite slow in adopting that because of complianceand regulatory and risk appetite. But we are now getting into it. So we're now either about to offer or already offeringcrypto ETF. So being very careful about the know your customer but being able to offer the product and when you look at some ofthe things that we should be looking out for. So I know you want to go quite aggressively in the investment bank and take on theU.S. lenders. How do you do that. Well we know that is that that is a big game you just describedthere. We are probably one of the top two or three corporate investmentbanks in Europe already. Our investment bank went from being 18 to being about 25 percent of earnings last year.But it's very focused. So we want it to be focused on a verticals where we can compete with world leaders in renewablesin infrastructure and then in the regions and countries where we can compete. So where we can be very competitive with thebiggest banks in the world. Is when you have a customer in the US that wants to buy a company in Brazil even one way or aChinese company investing in LatAm we are actually the go to bank. Oh you want to do a Europe U.S. transaction. So where wehave this as I was saying in market scale and we know the corporate really well we can connect better than almost anybody.But we're not pretending to play in the big leagues in some products. I mean that's that's not our aim. Talk to me a littlebit about Basel 3 briefly. So the first thing I want to say is European banks. And I can say this is representative of theEuropean Banking Federation which I'm chairing right now. You know we all want to be Basel compliant and we think it's veryimportant. We are Basel compliant. What we also saying it's important we can continue as we have during the crisis tosupport our customers and the economy. And so finding that balance is really what our aim is. Do you think we'll find thatbalance. I'm always optimistic of these things. How optimistic are you about the green recovery changing some ofwhat you're seeing in Spain or some of the imbalances in Europe. Well I mean I would put it in a positive way rather thanimbalances. I would say complementarity is so I think you know southern Europe northern Europe we compliment each other. We canall not all make the same things. You know if we all make BMW ISE who's going to buy them. Right. And so the question is howdo we have a Europe that is stronger I believe in stronger together. I think Europe has shown leadership during the crisis.We've shown we learned from what doesn't work. So we learn from the 0 8 crises. We are ahead of the markets in scale and speed.And so I think that is really good news. And I my hope is that we continue along those lines with capital markets union bankingunion you know common services. And I'm really finding the way to work together between north and south because I think we eachof us have a space and we know what works. You know investing in education being more productive is what will allow us to have amore inclusive Europe. So given what we've seen with Brexit maybe some of the things that we've seen here in the UK comparedto other countries where do you see the future of Santander UK. So I see the future Santander UK working together across thatone Santander vision we have. So you know at the end for us serving our customers in Britain or in Poland or in Spain youknow we're not that different. We all want simple services that work fast that are competitive in pricing that are easy to use.And so we have created a one single European leadership where some products would be built in the UK and some products will bebuilt in Poland or Spain or Portugal. And it's a very important role because our bank here issignificant. We have you know 15 million active customers 20 million total customers. So it's a very important role withinSantander. Do you think we'll finally see some kind of cross-border banking consolidation. I don't see it for now. No.Why. Because you know even though I've said and I'm very optimisticabout the future we don't have a single banking union. We don't have a common deposit insurance for cross countries in Europe.You know there is a penalty for becoming bigger that I don't think at least my view is banks are not going to be so happy topay. So I think that's going to. It's hard. The rules need to change.Does that impact actually green finance at all or is it two separate issues. You don't need bigger banks to be able to offermore services. No but as we've seen in the US you know 10 years ago European banks and U.S. banks were about you know same valueother things equal today. There's a big gap. And I get asked this question. One of the reasons is we don't have a singlemarket. You know there's different rules you could not expand across Europe. It's for us. It's within DAX. It's old players.And a final question if we don't get an agreement from a substantial agreement from leaders at COP 26 what can financedo. Can can businesses actually do much more much faster. I've said this a few times. We cannot be the police for climate.We can lead. We want to lead. We have taken very important steps. But we also need I think governments regulators and usalso we need to do a lot more. You know as soon as possible. But we need to work together on that because at the end it's ourcustomers that need to transition. So they need to be plants from governments to end subsidies tofossil fuels. So our customers can have appropriate transition plans. And if you go to small customers in rural areas ordeveloping economies you know they need to be able to pay for that with some rules that are across the countries hopefullyacross the world and a common or aligned at least.

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Santander's Ana Botin on Climate, Inflation and the Future of Crypto

Banco Santander's Chairman Ana Botin discusses an array of topics in an exclusive TV interview with Francine Lacqua. In the run up to COP26, she highlighted some of the difficulties the world and the banking sector is facing as it strives to transition towards a more climate friendly future. In a post-pandemic context rattled by an energy crisis, her focus and worry is on not to letting anyone behind, she said. Botin also said she believes crypto is the ''new big thing'' in markets, and that it will be crucial to see how central banks regulate it. (Source: Bloomberg)

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