Santander Names Alvarez CEO in Botin’s First Board Revamp

By Macarena Munoz and Ben Sills

Banco Santander SA (SAN) Chairman Ana Botin replaced the bank’s chief executive officer and two directors two months after taking over from her late father.
Santander promoted Jose Antonio Alvarez to chief executive officer, replacing Javier Marin. Jose Garcia Cantera will replace Alvarez, 54, as chief financial officer and the appointments will take effect Jan. 1, the bank said in a statement today. Marin, 48, will leave Spain’s biggest bank after less than two years as CEO, a spokesman said.
As she took over from her father, Ana, 54, signaled tougher competition and stricter regulation would increasingly challenge Santander. The lender is strengthening its reach that
already stretches from the U.S. to Poland and Brazil as its home nation’s economy recovers and regulators demand more capital.
“The new CEO is characterized by his vision of global markets,” said Alvaro Cuervo, director of the University College of Financial Studies in Madrid, who served alongside Alvarez on the board of Bolsas y Mercados Espanoles. “Perhaps the focus on Spain loses emphasis. And perhaps it will mean an increase in emphasis on investment banking.”
Shares rose as much as 1.9 percent and were 1.6 percent higher as of 1:25 p.m. in Madrid, increasing the year’s gains to 11 percent.

Photographer: Balint Porneczi/Bloomberg

Santander's Jose Antonio Alvarez.

‘Own Stamp’

After working for Banco Bilbao Vizcaya Argentaria SA for more than 10 years, Alvarez joined Banco Santander in 2002 and was appointed CFO in 2004. Born in Leon, a province in the North-West of Spain, he has an economics degree from Santiago de Compostela University and earned an MBA from Chicago University.
“Ana Botin is obviously looking to put her own stamp on the bank,” said Daragh Quinn, an analyst at Nomura International in Madrid. “Alvarez is very well known to the markets, he has a strong knowledge of the bank. He is well suited for the role.”
Marin was appointed CEO in Apr. 2013 after the previous CEO, Alfredo Saenz resigned. Under Marin’s tenure, Santander’s shares have risen about 30 percent as the bank offset a contraction in the home economy with growth in other nations.
In the third quarter, profit rose 52 percent to 1.61 billion euros ($2 billion), as bad loans dropped for third straight quarter. Global wholesale banking generated 22 percent of the lender’s profit in the first nine months of year, while income from Spain represented 14 percent.

‘More Transparency’

Banco Santander today also appointed Bruce Carnegie-Brown, Sol Daurella and Carlos Fernandez to the board. Rodrigo Echenique, a non-executive board member has been appointed vice chairman. Fernando de Asua and Abel Matutes have resigned from the board, the bank said.

Photographer: Angel Navarrete/Bloomberg

Santander's outgoing Chief Executive Officer Javier Marin.

“We expect continuity, predictability and potentially more transparency on issues such as capital and strategic priorities,” Citigroup Inc. analysts Stefan Nedialkov and Francesco Di Giambattista wrote in a note to clients.
Santander needs to address how it allocates capital across subsidiaries and review its dividend policy and consider paying in cash, the analysts wrote.
Santander was among lenders that passed the European Central Bank review of bank’s balance sheets. The firm posted a core equity Tier 1 ratio of 10.34 percent under ECB’s asset quality review and 8.95 percent in the adverse scenario of the stress test, above the 8 percent and 5.5 percent pass thresholds.