1 00:00:02,720 --> 00:00:08,920 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Speaking of banks, it's 2 00:00:08,920 --> 00:00:11,840 Speaker 1: a beautiful day to talk about banking. In recent months, 3 00:00:11,840 --> 00:00:15,440 Speaker 1: Santander has overtaken UBS to become the largest bank in 4 00:00:15,520 --> 00:00:18,880 Speaker 1: continental Europe, but it's also doubling down in the United 5 00:00:18,920 --> 00:00:21,319 Speaker 1: States as well, where it has a huge presence with 6 00:00:21,560 --> 00:00:25,479 Speaker 1: open Bank joining us now on abouteen, Executive chair of 7 00:00:25,600 --> 00:00:30,240 Speaker 1: Santander open Bank. What an interesting moment to talk about 8 00:00:30,440 --> 00:00:33,560 Speaker 1: interest rates in banking as well, because you're offering north 9 00:00:33,600 --> 00:00:36,720 Speaker 1: to four percent and it's among the most attractive rates 10 00:00:36,720 --> 00:00:38,920 Speaker 1: in the industry. What does this mean in terms of 11 00:00:38,960 --> 00:00:41,920 Speaker 1: your ambition to pull more money in after you've crossed 12 00:00:41,960 --> 00:00:43,159 Speaker 1: the five billion dollar. 13 00:00:42,960 --> 00:00:47,320 Speaker 2: Threshold expected to be here. Thanks for inviting me. And 14 00:00:47,880 --> 00:00:49,720 Speaker 2: by the way, I try to open a few open 15 00:00:49,760 --> 00:00:52,199 Speaker 2: Bank accounts in the makeup room, so I'll come back 16 00:00:52,240 --> 00:00:57,440 Speaker 2: and check soon. So open Bank is a major step 17 00:00:57,840 --> 00:01:02,200 Speaker 2: in our US strategy. Is the perfect example of our 18 00:01:02,240 --> 00:01:07,280 Speaker 2: platform goals where we're building once across the group and 19 00:01:07,319 --> 00:01:10,200 Speaker 2: it's had a fantastic customer reception. You know, we're one 20 00:01:10,280 --> 00:01:13,360 Speaker 2: hundred and fifty thousand customers, over five billion in deposits. 21 00:01:13,920 --> 00:01:15,920 Speaker 2: And what matter is is that this is great for 22 00:01:15,959 --> 00:01:18,479 Speaker 2: our shareholders too, because it's lowering our cost of funds 23 00:01:18,560 --> 00:01:21,160 Speaker 2: allows us to grow faster in our auto landing business. 24 00:01:21,200 --> 00:01:23,679 Speaker 2: So it's you know, great for our customers, great for 25 00:01:23,680 --> 00:01:24,360 Speaker 2: our shareholders. 26 00:01:24,680 --> 00:01:26,840 Speaker 1: What does it mean for your broader strategy in the 27 00:01:26,920 --> 00:01:29,360 Speaker 1: United States and the ambition that is here today? 28 00:01:30,400 --> 00:01:34,800 Speaker 2: So US is a core strategic market for Santander. We 29 00:01:34,840 --> 00:01:38,720 Speaker 2: see a huge opportunity for profitable organic growth and this 30 00:01:38,800 --> 00:01:41,840 Speaker 2: is really important. It has been top three in value 31 00:01:41,840 --> 00:01:45,160 Speaker 2: creation over the last decade for our shareholders and euros 32 00:01:45,360 --> 00:01:48,680 Speaker 2: and very importantly, we are focusing on the businesses where 33 00:01:48,720 --> 00:01:51,800 Speaker 2: we have a competitive advantage and that bring network effects. 34 00:01:52,440 --> 00:01:56,000 Speaker 2: So we see again tremendous opportunity in the United States. 35 00:01:56,240 --> 00:01:58,400 Speaker 1: Can any of that be accomplished through M and A 36 00:01:58,640 --> 00:02:00,640 Speaker 1: or do you think that mostly will be accomplished through 37 00:02:00,720 --> 00:02:01,480 Speaker 1: organic growth. 38 00:02:02,040 --> 00:02:05,360 Speaker 2: Our aim, as as we have said to shareholders, is 39 00:02:05,400 --> 00:02:08,919 Speaker 2: to achieve fifteen percent our OT adjusted at twelve percent 40 00:02:09,280 --> 00:02:11,480 Speaker 2: in the United States this year. We will get there 41 00:02:12,080 --> 00:02:14,720 Speaker 2: and very importantly, Santan that as a group this year 42 00:02:14,760 --> 00:02:17,640 Speaker 2: will deliver return on tangible equity or just mentioning that 43 00:02:17,760 --> 00:02:20,960 Speaker 2: of sixteen and a half close to seventeen percent, which 44 00:02:21,080 --> 00:02:23,440 Speaker 2: is in gold in well, you know, it would be 45 00:02:23,480 --> 00:02:26,000 Speaker 2: the third of the major banks. The big banks in 46 00:02:26,040 --> 00:02:28,239 Speaker 2: the US would be number two or three, I believe. 47 00:02:28,720 --> 00:02:30,600 Speaker 1: So what does this mean in terms of how you 48 00:02:30,639 --> 00:02:32,040 Speaker 1: want to get there? What do you think are going 49 00:02:32,080 --> 00:02:35,160 Speaker 1: to be the biggest profitability lines? And does any of 50 00:02:35,200 --> 00:02:38,560 Speaker 1: the US broader strategy from the Trump administration get in 51 00:02:38,560 --> 00:02:40,840 Speaker 1: the way given the concerns about the macro environment. 52 00:02:42,000 --> 00:02:44,400 Speaker 2: Those are like five questions FINALI so let me just 53 00:02:44,639 --> 00:02:47,200 Speaker 2: first start how we will do it? So for us, 54 00:02:47,320 --> 00:02:49,600 Speaker 2: you know, we set out in twenty nineteen to become 55 00:02:49,639 --> 00:02:53,960 Speaker 2: an open financial services platform and very importantly to do 56 00:02:54,040 --> 00:02:56,080 Speaker 2: things in a way that is simple, personal, unfair for 57 00:02:56,120 --> 00:02:59,720 Speaker 2: our customers. And that is what we now have embodied 58 00:02:59,760 --> 00:03:04,600 Speaker 2: in transformation, which is a structural shift in how we operate, 59 00:03:04,680 --> 00:03:07,640 Speaker 2: so much lower cost to serve, which benefits customers and 60 00:03:07,680 --> 00:03:11,400 Speaker 2: delivers great returns. A great example is our cost income. 61 00:03:11,919 --> 00:03:14,280 Speaker 2: You know, again, the top three banks in this country 62 00:03:14,480 --> 00:03:17,720 Speaker 2: are around I believe sixty percent. The comparable cost income 63 00:03:17,760 --> 00:03:20,639 Speaker 2: for US is forty four percent. So we are as 64 00:03:20,680 --> 00:03:23,040 Speaker 2: competitive or better than most of the banks in the 65 00:03:23,160 --> 00:03:25,800 Speaker 2: United States. And this is great for our customers. And 66 00:03:25,880 --> 00:03:27,920 Speaker 2: one transformation is the way we get there. 67 00:03:28,240 --> 00:03:30,320 Speaker 1: And the second part of the question was really about 68 00:03:30,360 --> 00:03:33,160 Speaker 1: the broader landscape here. With so much focus on the 69 00:03:33,240 --> 00:03:36,000 Speaker 1: US consumer, there is a lot of concern of whether 70 00:03:36,040 --> 00:03:38,480 Speaker 1: the US consumer is going to feel the pressure of 71 00:03:38,520 --> 00:03:41,200 Speaker 1: the terror strategy. Do you share those concerns. 72 00:03:41,920 --> 00:03:44,520 Speaker 2: So we serve about five million consumers in the United 73 00:03:44,520 --> 00:03:47,640 Speaker 2: States and the headline is very clear. The US consumer 74 00:03:48,000 --> 00:03:51,440 Speaker 2: is resilient and the behavior is as good as we 75 00:03:51,520 --> 00:03:55,320 Speaker 2: expected this year. So there is a normalization of cost 76 00:03:55,360 --> 00:03:57,720 Speaker 2: of credit vis a VI twenty nineteen, but more or 77 00:03:57,800 --> 00:04:00,520 Speaker 2: less aligned with twenty nineteen, and what we are seeing 78 00:04:00,640 --> 00:04:04,040 Speaker 2: is pretty good. Now, if you think about sentiment, that's 79 00:04:04,080 --> 00:04:08,320 Speaker 2: another thing. And of course tariffs brings greater uncertainty, and 80 00:04:08,360 --> 00:04:11,120 Speaker 2: so there is a high probability that you will see 81 00:04:11,120 --> 00:04:16,080 Speaker 2: consumers and businesses, you know, getting weaker in the next 82 00:04:16,080 --> 00:04:19,800 Speaker 2: few months. But as of today, US consumer very resilient. 83 00:04:20,680 --> 00:04:23,600 Speaker 1: Over and over we hear about investors starting to get 84 00:04:23,640 --> 00:04:27,640 Speaker 1: somewhat worried about US exceptionalism. Do you think that the 85 00:04:27,760 --> 00:04:30,160 Speaker 1: US is going to still be the place where capital 86 00:04:30,240 --> 00:04:31,640 Speaker 1: flows to the most. 87 00:04:32,400 --> 00:04:35,560 Speaker 2: So, you know, I'd like to answer that question in 88 00:04:35,600 --> 00:04:39,080 Speaker 2: two levels. You know, one is US has grown much 89 00:04:39,120 --> 00:04:41,400 Speaker 2: more than the rest of the world, especially Europe, over 90 00:04:41,400 --> 00:04:46,359 Speaker 2: the last decade. What happens from here onwards, it's a 91 00:04:46,400 --> 00:04:50,320 Speaker 2: relative some game, right markets, you measure one against the other. 92 00:04:50,440 --> 00:04:54,480 Speaker 2: I think the opportunity in Europe today is greater. However, 93 00:04:54,600 --> 00:04:57,640 Speaker 2: we SANTANDERA deeply committed and we will continue to allocate 94 00:04:58,000 --> 00:04:59,920 Speaker 2: more organic capital to the United States. 95 00:05:00,000 --> 00:05:01,640 Speaker 1: Now, I want to read you a quote recently from 96 00:05:01,720 --> 00:05:05,120 Speaker 1: Jamie Diamond, who spoke in Ireland saying that the EU 97 00:05:05,240 --> 00:05:08,680 Speaker 1: in particular has a huge problem at the moment. He 98 00:05:08,720 --> 00:05:11,520 Speaker 1: says that Europe has gone from ninety percent US GDP 99 00:05:11,640 --> 00:05:15,080 Speaker 1: to sixty five percent over the last ten to five years, 100 00:05:15,080 --> 00:05:18,520 Speaker 1: ten to fifteen years. That's not good. He said, you're losing. 101 00:05:19,320 --> 00:05:21,680 Speaker 1: What do you have to say to Jamie Diamond. 102 00:05:22,040 --> 00:05:24,520 Speaker 2: So most of the time I agree with Jamie, he's 103 00:05:24,520 --> 00:05:28,039 Speaker 2: done a great job. But in this case I don't agree, 104 00:05:28,440 --> 00:05:32,000 Speaker 2: and I think in Europe the opportunity is huge and 105 00:05:32,040 --> 00:05:37,039 Speaker 2: there's only upside right now. Europe has strong fundamentals. You 106 00:05:37,040 --> 00:05:43,479 Speaker 2: know that to GDP is better strong institutions, so strong fundamentals. Second, 107 00:05:43,760 --> 00:05:46,360 Speaker 2: not all of Europe is the same same way that 108 00:05:46,400 --> 00:05:49,599 Speaker 2: Texas is not the same as California or Montana. Right, 109 00:05:49,920 --> 00:05:52,520 Speaker 2: Southern Europe today has higher growth than most of the 110 00:05:52,600 --> 00:05:56,680 Speaker 2: United States, with very great opportunities to grow, but last 111 00:05:56,680 --> 00:05:59,440 Speaker 2: and not least. You know, in terms of relative valuation, 112 00:06:00,200 --> 00:06:02,480 Speaker 2: if you look at banks, you know we have an 113 00:06:02,560 --> 00:06:05,640 Speaker 2: rot year as a return of close to seventeen percent. 114 00:06:05,680 --> 00:06:09,760 Speaker 2: We're treading at eight times earnings, whereas the top three 115 00:06:09,800 --> 00:06:12,600 Speaker 2: banks in the United States are trading with similar average 116 00:06:12,680 --> 00:06:16,279 Speaker 2: returns at twelve to fourteen. So I think this shows 117 00:06:16,320 --> 00:06:19,560 Speaker 2: why there is a big opportunity to invest in Europe, 118 00:06:20,000 --> 00:06:22,400 Speaker 2: and I believe that is something which you know, it's 119 00:06:22,440 --> 00:06:25,479 Speaker 2: not just the banking sector, it's in other sectors. Just 120 00:06:25,560 --> 00:06:28,640 Speaker 2: need to choose your country, your sector, and your company 121 00:06:29,200 --> 00:06:30,479 Speaker 2: the right one. 122 00:06:30,560 --> 00:06:32,640 Speaker 1: I want to get your view on something large that's 123 00:06:32,680 --> 00:06:34,760 Speaker 1: happening in the United States right now, because I know 124 00:06:34,800 --> 00:06:37,120 Speaker 1: you've been thinking about how technology is going to change 125 00:06:37,160 --> 00:06:40,520 Speaker 1: the business. It's the stable coin legislation that is close 126 00:06:40,560 --> 00:06:43,480 Speaker 1: to passing. How is something there thinking about stable coins 127 00:06:43,480 --> 00:06:45,760 Speaker 1: and how you might adopt it in the future if 128 00:06:45,800 --> 00:06:46,600 Speaker 1: you will adopt it. 129 00:06:47,200 --> 00:06:50,200 Speaker 2: So, we don't see stable gone as a revolution. We 130 00:06:50,240 --> 00:06:52,880 Speaker 2: see it more as an evolution, and we believe that 131 00:06:52,880 --> 00:06:56,359 Speaker 2: it's critically important that you have responsible players and that 132 00:06:56,440 --> 00:06:59,200 Speaker 2: it's regulated the right way, as I believe it will 133 00:06:59,240 --> 00:07:02,640 Speaker 2: happen here in it United States. You need responsible actors 134 00:07:02,720 --> 00:07:07,599 Speaker 2: like banks that bring compliance, trust and scale, and so 135 00:07:08,240 --> 00:07:11,000 Speaker 2: I do think it has benefits in terms of being 136 00:07:11,040 --> 00:07:16,400 Speaker 2: globally interoperable, you know, fast efficient, you know, bank rails 137 00:07:16,520 --> 00:07:19,400 Speaker 2: actually can get you there. Also, like if you use 138 00:07:19,440 --> 00:07:22,680 Speaker 2: how Global Payments API, but it's only now sunkander countries. 139 00:07:22,800 --> 00:07:27,000 Speaker 2: This is global, So I do think it's you know, 140 00:07:27,080 --> 00:07:30,440 Speaker 2: there is an opportunity. However, it is in new currency, 141 00:07:30,600 --> 00:07:32,600 Speaker 2: and so you have to make sure that you understand 142 00:07:32,600 --> 00:07:34,760 Speaker 2: the risks. It is in new currency and has the 143 00:07:34,840 --> 00:07:36,120 Speaker 2: risks of a currency. 144 00:07:36,400 --> 00:07:38,920 Speaker 1: What are the biggest risks? We hear time and time 145 00:07:38,960 --> 00:07:42,480 Speaker 1: again that because stable coins have the potential to hold 146 00:07:42,520 --> 00:07:45,520 Speaker 1: so much by way of you as treasuries, that there 147 00:07:45,560 --> 00:07:47,840 Speaker 1: is a potential as as market grows over time that 148 00:07:47,920 --> 00:07:50,720 Speaker 1: it could create some sort of systemic risk. Do you 149 00:07:50,760 --> 00:07:51,440 Speaker 1: worry about that? 150 00:07:51,800 --> 00:07:54,240 Speaker 2: Well, right now it's pretty small, so I don't think 151 00:07:54,240 --> 00:07:57,200 Speaker 2: that's a systemic risk at this time. I do think 152 00:07:57,320 --> 00:07:59,800 Speaker 2: if it grows, it's important that you're in the hands 153 00:07:59,840 --> 00:08:04,840 Speaker 2: of again trusted institutions that are compliant under standard risks 154 00:08:05,120 --> 00:08:06,880 Speaker 2: unmanage the risks appropriately. 155 00:08:07,560 --> 00:08:09,000 Speaker 1: Now before I let you go, Also, I want to 156 00:08:09,000 --> 00:08:11,960 Speaker 1: get an update because you made a lot of news, 157 00:08:12,000 --> 00:08:13,920 Speaker 1: A lot of attention was drawn when you had hired 158 00:08:13,960 --> 00:08:16,840 Speaker 1: teams over from Credit Suite to build up your investment 159 00:08:16,960 --> 00:08:19,720 Speaker 1: banking franchise as well. Where does this fit into the 160 00:08:19,760 --> 00:08:21,160 Speaker 1: broader strategy of Santander. 161 00:08:21,920 --> 00:08:24,440 Speaker 2: Well, as I was saying before, one transformation is the 162 00:08:24,440 --> 00:08:28,160 Speaker 2: way that Santander is delivering on the open financial services platform, 163 00:08:28,200 --> 00:08:30,320 Speaker 2: and the corporate bank was one of the first that 164 00:08:30,360 --> 00:08:34,679 Speaker 2: we started to transform. The corporate bank at Santander has 165 00:08:34,960 --> 00:08:38,599 Speaker 2: twenty percent returns. It is serving our customers in our footprint, 166 00:08:39,000 --> 00:08:41,000 Speaker 2: and the team that we have brought in New York 167 00:08:41,080 --> 00:08:44,880 Speaker 2: is helping us actually take advantage of those corporate relationships 168 00:08:44,960 --> 00:08:48,120 Speaker 2: and give them access to the deepest market in the world, 169 00:08:48,160 --> 00:08:50,760 Speaker 2: which is the US capital market. So it's a win win, 170 00:08:51,280 --> 00:08:54,520 Speaker 2: It leverages our network and it's delivering great profitability. 171 00:08:55,080 --> 00:08:59,160 Speaker 1: How can US clients expect you to be using technology 172 00:08:59,360 --> 00:09:02,160 Speaker 1: more as you grow the bank in the United States? 173 00:09:02,640 --> 00:09:05,120 Speaker 2: So again, part of the one transformation is open bank. 174 00:09:05,160 --> 00:09:08,160 Speaker 2: Open bank is built on our own tech, our own platform. 175 00:09:08,360 --> 00:09:11,760 Speaker 2: It's scales. We have the biggest Open Bank is today 176 00:09:11,800 --> 00:09:14,520 Speaker 2: the biggest digital bank in Europe. It's up and running 177 00:09:14,520 --> 00:09:17,280 Speaker 2: in Germany, in Iberia, in Mexico and the United States, 178 00:09:17,720 --> 00:09:20,560 Speaker 2: and we believe that this will again be a big 179 00:09:21,480 --> 00:09:25,280 Speaker 2: value add to US consumers. And it's only the first step. 180 00:09:25,640 --> 00:09:28,760 Speaker 2: We have more products coming in the next twelve months. 181 00:09:28,800 --> 00:09:30,840 Speaker 2: You will be able to bank with open Bank all 182 00:09:30,880 --> 00:09:32,080 Speaker 2: your basic banking needs. 183 00:09:32,559 --> 00:09:35,160 Speaker 1: Anna Bottein, Executive Chair of san Tandeerra, thank you so 184 00:09:35,240 --> 00:09:37,600 Speaker 1: much for joining us while you are here in town. 185 00:09:37,679 --> 00:09:40,959 Speaker 1: Of course, a lot of changes happening and new products 186 00:09:40,960 --> 00:09:42,600 Speaker 1: being launched. We will keep an eye on all of that.