File Photo: Emilio Botin, Executive Chairman of Spain's biggest bank Santander (Reuters)
Madrid, Spain:
Emilio Botin, one of Spain's most powerful men who transformed Santander from a small domestic lender into the euro zone's biggest bank, has died of a heart attack, aged 79.
The bank said on Wednesday it would hold a board meeting later in the day to nominate a successor as chairman. Analysts and investors have long expected this would be Botin's eldest daughter Ana Botin, who heads Santander's British business.
Such a move could spark controversy, however, with banking dynasties coming under criticism after a scandal at Portugal's Banco Espirito Santo, where the founding family's holdings are being investigated over financial irregularities.
"Succession shouldn't just be saying 'my daughter's going to take over'," said a corporate governance expert at a global asset manager which owns Santander shares, speaking on condition of anonymity.
Another potential replacement is Matias Inciarte, 66, a former government minister and a member of the board of directors at the bank since 1988, who currently holds the post of second vice-chairman.
At 1000 GMT, Santander shares were down 1.4 percent at 7.65 euros.
Emilio Botin, "El Presidente" to co-workers and the third generation of Botins to run Santander, was at the forefront of a drive to create global banks, offering a one-stop shop to multinational companies and a range of services to consumers.
He used his keen eye for deals to spread Santander's red-liveried brand with its stylised 'S' logo around the world, amassing 1.4 trillion euros ($1.8 trillion) of funds and nearly 200,000 employees.
"He was a man who has been able to make Banco Santander the most important bank of our country," Spanish Prime Minister Mariano Rajoy told journalists in Parliament.
"I had a meeting with him last week and he was well and in good form. It has been a surprise and a blow."
"UNOFFICIAL KING OF SPAIN"
Botin shook up Spanish banking with a campaign to attract depositors in 1989, forcing rivals to compete on price, and bought troubled Banesto in 1994 to create Spain's biggest bank.
He took advantage of cultural and language ties to expand rapidly into Latin America, and in 2004 snapped up Britain's Abbey National for more than 9 billion pounds ($14.5 billion).
More canny dealmaking followed. In 2007, Santander made 2.4 billion euros in three weeks through deals to buy and then sell Italian bank Antonveneta. And while partners RBS and Fortis were driven to seek state bailouts after a carve up of ABN Amro on the eve of the financial crisis, Santander emerged comparatively unscathed with the Dutch group's healthier Brazilian arm.
The expansion helped to shield Santander from the euro zone debt crisis and Spain's long-running recession, with the bank now making only about 14 percent of its profit at home.
But it has not been all success. Santander has trailed the total returns to shareholders delivered in the past 10 years by rivals JPMorgan and HSBC - two firms Botin liked to measures himself against, according to colleagues.
There has been controversy too. Botin's family, which owns barely 2 percent of Santander, paid 200 million euros in penalties in 2011 to avoid charges of tax evasion related to a secret Swiss bank account.
Few doubt Ana Botin, 53, has a strong claim to succeed her father. After an eight-year stint at JPMorgan's investment bank, she has spent most of the last 25 years at Santander.
But her high profile in the bank has attracted criticism. Earlier this year two shareholder advisory firms, ISS and Glass Lewis & Co, recommended shareholders vote against her re-election as a director - one because it thought Botins were over-represented on the board, the other because it considered there were not enough independent members.
In the event, she got the backing of 81.3 percent of the votes, almost unchanged from three years earlier.
"Botin was the unofficial king of Spain. His death creates uncertainty and a power vacuum at the top," said a London-based hedge fund manager, who declined to be named.
"The obvious successor is his daughter Ana, which was always the plan, but he hasn't had a proper chance to groom her and install her as chairwoman before he died so there could be some infighting."
(1 US dollar = 0.6198 British pound)
(1 US dollar = 0.7731 euro)
The bank said on Wednesday it would hold a board meeting later in the day to nominate a successor as chairman. Analysts and investors have long expected this would be Botin's eldest daughter Ana Botin, who heads Santander's British business.
Such a move could spark controversy, however, with banking dynasties coming under criticism after a scandal at Portugal's Banco Espirito Santo, where the founding family's holdings are being investigated over financial irregularities.
"Succession shouldn't just be saying 'my daughter's going to take over'," said a corporate governance expert at a global asset manager which owns Santander shares, speaking on condition of anonymity.
Another potential replacement is Matias Inciarte, 66, a former government minister and a member of the board of directors at the bank since 1988, who currently holds the post of second vice-chairman.
At 1000 GMT, Santander shares were down 1.4 percent at 7.65 euros.
Emilio Botin, "El Presidente" to co-workers and the third generation of Botins to run Santander, was at the forefront of a drive to create global banks, offering a one-stop shop to multinational companies and a range of services to consumers.
He used his keen eye for deals to spread Santander's red-liveried brand with its stylised 'S' logo around the world, amassing 1.4 trillion euros ($1.8 trillion) of funds and nearly 200,000 employees.
"He was a man who has been able to make Banco Santander the most important bank of our country," Spanish Prime Minister Mariano Rajoy told journalists in Parliament.
"I had a meeting with him last week and he was well and in good form. It has been a surprise and a blow."
"UNOFFICIAL KING OF SPAIN"
Botin shook up Spanish banking with a campaign to attract depositors in 1989, forcing rivals to compete on price, and bought troubled Banesto in 1994 to create Spain's biggest bank.
He took advantage of cultural and language ties to expand rapidly into Latin America, and in 2004 snapped up Britain's Abbey National for more than 9 billion pounds ($14.5 billion).
More canny dealmaking followed. In 2007, Santander made 2.4 billion euros in three weeks through deals to buy and then sell Italian bank Antonveneta. And while partners RBS and Fortis were driven to seek state bailouts after a carve up of ABN Amro on the eve of the financial crisis, Santander emerged comparatively unscathed with the Dutch group's healthier Brazilian arm.
The expansion helped to shield Santander from the euro zone debt crisis and Spain's long-running recession, with the bank now making only about 14 percent of its profit at home.
But it has not been all success. Santander has trailed the total returns to shareholders delivered in the past 10 years by rivals JPMorgan and HSBC - two firms Botin liked to measures himself against, according to colleagues.
There has been controversy too. Botin's family, which owns barely 2 percent of Santander, paid 200 million euros in penalties in 2011 to avoid charges of tax evasion related to a secret Swiss bank account.
Few doubt Ana Botin, 53, has a strong claim to succeed her father. After an eight-year stint at JPMorgan's investment bank, she has spent most of the last 25 years at Santander.
But her high profile in the bank has attracted criticism. Earlier this year two shareholder advisory firms, ISS and Glass Lewis & Co, recommended shareholders vote against her re-election as a director - one because it thought Botins were over-represented on the board, the other because it considered there were not enough independent members.
In the event, she got the backing of 81.3 percent of the votes, almost unchanged from three years earlier.
"Botin was the unofficial king of Spain. His death creates uncertainty and a power vacuum at the top," said a London-based hedge fund manager, who declined to be named.
"The obvious successor is his daughter Ana, which was always the plan, but he hasn't had a proper chance to groom her and install her as chairwoman before he died so there could be some infighting."
(1 US dollar = 0.6198 British pound)
(1 US dollar = 0.7731 euro)
© Thomson Reuters 2014
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