Santander’s siesta
09 July 2014
Banco Santander’s sale of 50 percent of custody assets to Warburg Pincus shows growth in Spanish and Latin American markets and global ambitions
Image: Shutterstock
With the Spanish market now under recovery, a spokesperson for Banco Santander explains that the company is in a position, with “ a growing available wallet,” to expand. Last year, the Santander group registered an increase of 90 percent in attributable profit from the previous year. Their unique access to the Latin American market is showing “favourable growth prospects” with a “stable regulatory environment” to capture market share.
The bank recently sold 50 percent of its custody business in an alliance with Warburg Pincus in order to have joint control in partnering with the investors to support growth and development of a franchise that has strong regional capabilities.
With markets established in Spain, Mexico and Brazil, it is hoped that the alliance will give Banco Santander access to global growth with Warburg Pincus’ Singapore based affiliate, Temasek, and FINESP Holdings II B.V.
Banco Santander’s total custody operations for the Spanish and Latin American markets has an approximate value of €975 million. Once the alliance is closed in Q4 2014 it is predicted to generate net capital of €410 million.
With the capital from the 50 percent stake and the new alliance, Banco Santander will be able to invest in new products and services in its technology platforms. The spokesperson elaborates, “Santander has been performing significant investments in IT and Ops to meet increasing product complexity and regulatory challenges in our custody services. The new company will allow us to increase our capacity to adapt our infrastructure and products to meet clients’ needs.”
By increasing the developments of new and existing products, the company has stated that it will focus on improving the experience for customers through “integrated global management and [a] greater focus and specialisation through front-to-back organisational structure, having exclusively dedicated support areas to the business.”
Currently, Banco Santander offer a “full fledge service proposal” to develop their fund administration, depository and custody businesses. Javier Marín, CEO of Banco Santander, says the alliance will “significantly increase” these services. The spokesperson added: “The development of an integrated business will allow us to accelerate business build up and tackle new clients segments.”
A specialist in private equity, Warburg Pincus has more than $37 billion in assets under management with an active portfolio in over 120 companies worldwide. Banco Santander stated that choosing Warburg Pincus for the alliance was an easy decision as they had previously partnered with them to build best-in-class businesses with SCUSA, the group’s consumer finance unit in the US, and in Santander Asset.
Temasek has been part of the Warburg Pincus group since 1974 and has an asset portfolio of $215 billion as of March 2013. The majority (71 percent) of the portfolio is in Asian markets, with 25 percent in the mature economies of North America, Europe, Australia and New Zealand, and 2 percent in Latin America.
In a statement on their website, Temasek said they were “pleased to confirm the announcement”. The alliance will give them access to growth in the Americas and will allow Banco Santander to tap into Temasek’s 11 global offices across Asia, North America, Europe, Australia and New Zealand.
Daniel Zilberman, Warburg Pincus’ magaing director and head of its European financial services group, said that he was “pleased” to be able to “enhance [Banco Santander’s] focus on providing best-in-class products and services to its customers in Spain and Latin America.”
“The custody market benefits from long term structural growth and we look forward to supporting management in accelerating the company’s growth and service offering.”
The bank recently sold 50 percent of its custody business in an alliance with Warburg Pincus in order to have joint control in partnering with the investors to support growth and development of a franchise that has strong regional capabilities.
With markets established in Spain, Mexico and Brazil, it is hoped that the alliance will give Banco Santander access to global growth with Warburg Pincus’ Singapore based affiliate, Temasek, and FINESP Holdings II B.V.
Banco Santander’s total custody operations for the Spanish and Latin American markets has an approximate value of €975 million. Once the alliance is closed in Q4 2014 it is predicted to generate net capital of €410 million.
With the capital from the 50 percent stake and the new alliance, Banco Santander will be able to invest in new products and services in its technology platforms. The spokesperson elaborates, “Santander has been performing significant investments in IT and Ops to meet increasing product complexity and regulatory challenges in our custody services. The new company will allow us to increase our capacity to adapt our infrastructure and products to meet clients’ needs.”
By increasing the developments of new and existing products, the company has stated that it will focus on improving the experience for customers through “integrated global management and [a] greater focus and specialisation through front-to-back organisational structure, having exclusively dedicated support areas to the business.”
Currently, Banco Santander offer a “full fledge service proposal” to develop their fund administration, depository and custody businesses. Javier Marín, CEO of Banco Santander, says the alliance will “significantly increase” these services. The spokesperson added: “The development of an integrated business will allow us to accelerate business build up and tackle new clients segments.”
A specialist in private equity, Warburg Pincus has more than $37 billion in assets under management with an active portfolio in over 120 companies worldwide. Banco Santander stated that choosing Warburg Pincus for the alliance was an easy decision as they had previously partnered with them to build best-in-class businesses with SCUSA, the group’s consumer finance unit in the US, and in Santander Asset.
Temasek has been part of the Warburg Pincus group since 1974 and has an asset portfolio of $215 billion as of March 2013. The majority (71 percent) of the portfolio is in Asian markets, with 25 percent in the mature economies of North America, Europe, Australia and New Zealand, and 2 percent in Latin America.
In a statement on their website, Temasek said they were “pleased to confirm the announcement”. The alliance will give them access to growth in the Americas and will allow Banco Santander to tap into Temasek’s 11 global offices across Asia, North America, Europe, Australia and New Zealand.
Daniel Zilberman, Warburg Pincus’ magaing director and head of its European financial services group, said that he was “pleased” to be able to “enhance [Banco Santander’s] focus on providing best-in-class products and services to its customers in Spain and Latin America.”
“The custody market benefits from long term structural growth and we look forward to supporting management in accelerating the company’s growth and service offering.”
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