Santander streamlines its retail, commercial, and consumer operations in accordance with its strategic goals.
Santander, a leading commercial bank founded in 1857, has announced a significant reorganization of its business areas, aimed at strengthening core businesses, optimizing capital usage, and delivering shareholder returns. This reorganization is consistent with the bank’s strategic goals outlined at its Investor Day in February.
The changes align Santander's retail and commercial, and consumer activities with its current global model in Corporate & Investment Banking, Wealth Management & Insurance, and Payments. The bank is consolidating its activities across all markets under five global areas: Payments, Corporate & Investment Banking, Wealth Management & Insurance, Retail & Commercial, and Digital Consumer Bank.
Key Changes and Leadership
José M. Linares continues to lead Santander Corporate & Investment Banking (Santander CIB). Victor Matarranz remains the senior executive vice president and global head of Wealth Management & Insurance at the bank. Daniel Barriuso, who is also the senior executive vice president, global head of Retail & Commercial Banking and group chief transformation officer, will lead the new Retail & Commercial business area. José Luis de Mora, the senior executive vice president, global head of Digital Consumer Bank and group head of Corporate Development and Financial Planning, will lead the Digital Consumer Bank.
The bank's senior executive vice president and CEO of PagoNxt, Javier San Felix, will lead the Payments global business, which will include PagoNxt and Global Cards. Matiás Sánchez is the head of Global Cards at the bank.
Financial Targets Remain Unchanged
The bank's financial targets outlined in February remain unchanged, including achieving a return on tangible equity (RoTE) of 15-17% in 2023-2025 and an efficiency ratio of c.42% by 2025.
Santander's Strategic Vision
Santander set a target to perform at least €10 billion in share buybacks for 2025 and 2026 earnings, accelerating this execution using 50% of proceeds from the disposal of its Poland business. The group executed a bolt-on acquisition of TSB Bank, which is expected to deliver a RoIC above 20% and to be EPS accretive by around 4% by 2028.
This reorganization aligns with Santander’s February strategic vision by emphasizing capital discipline, inorganic growth through accretive acquisitions, and shareholder value enhancement via share buybacks. This dual approach aims to reinforce Santander’s competitive positioning and financial metrics over the medium term.
Ana Botín, the bank's executive chair, stated that the changes align with the bank's strategy and will allow it to serve customers better, while delivering profitable growth. The bank will publish information adapted to the new segments ahead of the 2023 full-year results announcement. The new global business areas will become the bank's primary reporting segments from January 2024.
The changes were announced on 18 September 2023 at Santander's Investor Day. The bank aims to add 40 million customers by 2025, increase return on tangible equity to 15-17%, and achieve double-digit average annual growth in tangible net asset value per share plus dividend per share through the cycle.
The reorganization of Santander, focusing on Payments, Corporate & Investment Banking, Wealth Management & Insurance, Retail & Commercial, and Digital Consumer Bank, signals a shift towards digital banking and investing within its business operations. The strategic vision outlined in February aims to enhance shareholder value through accretive acquisitions, share buybacks, and organic growth, underscoring Santander's commitment to finance and business.
