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AmericasNovember 2 2020

Santander chair on group’s Brazil strategy

Pandemic has thrown up unique challenges, admits Santander's executive chair Ana Botín.
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Ana Botín

Ana Botín

According to Santander’s executive chair, Ana Botín, many people in Brazil underestimated the risks of the pandemic to Latin America in early 2020. “If we hadn’t taken the steps we took in Brazil in February, we wouldn’t have been ready,” she says.

If Santander had needed to rush, “getting ready for remote work would not have been that easy,” says Ms Botín, whose Brazilian operations rely on a staff of nearly 50,000. These staff are also the group’s most profitable: as of June, Brazil generated about a third of total underlying attributable profit, which is nearly four times that of Santander’s home market, Spain. A year earlier, this ratio was 2:1.

Santander Brasil benefited from the group’s direct knowledge of what was already happening in Europe, she tells The Banker during an interview at her London house. 

New normal

Like many others, Ms Botín misses human interaction, having kept in touch with her international teams via video calls. “The economy doesn’t move if we don’t see each other in person. Would this be the same over Zoom?” she asks about our meeting. The answer, of course, is no. In spite of the face-masked greeting, the presence of hand sanitiser on the long table around which we sit, unnaturally far from each other, and the open window on a chilly, wet day.

Office space and its importance will not shrink in any significant way after Covid-19, thinks Ms Botín. But offices will have to be ready and work practices modified to deal with future similar events as scientists warn about their likelihood.

In Brazil’s case, after having failed to contain the pandemic, the country has suffered the second highest number of Covid-19-related deaths in the world (after the US) and a dire recession, which the International Monetary Fund (IMF) predicted, in June, to be 9.1%.

Brighter future

By the time we speak, Brazil’s future looks less gloomy. The IMF had revised its earlier projections for 2020 to a 5.8% decline — a figure not far from a general private sector’s consensus of about 5%. Ms Botín has seen a change of gear in the bank’s own figures: “In August and September, in Brazil, our activity levels were the same as they were last year,” she says, referring to third-quarter figures (unreleased as The Banker went to press). 

She says that while a historically low benchmark interest rate of 2% ate into margins, it also propped up transaction volumes — particularly in mortgages. Brazil’s central bank figures reveal the same trend: from January to August, residential mortgages to individuals grew by 6.5%, outpacing the 3.6% in the same period a year earlier. Mortgages, as well as auto finance, are part of the low risk areas that Santander Brasil wants to focus on in the future, says Ms Botín. 

Digital products will grow too, she says. The pandemic has sped up consumption through digital channels, with greater numbers of new digital customers. As of June, Santander Brasil had 14.5 million digital customers out of a total of 46.4 million. The bank plans to create a single digital platform across the group.

And part of the building blocks of this project is GetNet, a card and electronic payments processing business in which Santander started making investments over the past decade and which it fully purchased in 2018. “It is a Brazilian company,” says Ms Botín, “and we are taking it global,” pointing to the fact that if Brazil gains from the group’s international experience, it also helps design Santander’s future.

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Read more about:  Americas , Americas , Brazil
Silvia Pavoni is editor in chief of The Banker. Silvia also serves as an advisory board member for the Women of the Future Programme and for the European Risk Management Council, and is part of the London council of non-profit WILL, Women in Leadership in Latin America. In 2019, she was awarded an honorary fellowship by City University of London.
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