Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Speaking of banks, it's
Speaker 1: a beautiful day to talk about banking. In recent months,
Speaker 1: Santander has overtaken UBS to become the largest bank in
Speaker 1: continental Europe, but it's also doubling down in the United
Speaker 1: States as well, where it has a huge presence with
Speaker 1: open Bank joining us now on abouteen, Executive chair of
Speaker 1: Santander open Bank. What an interesting moment to talk about
Speaker 1: interest rates in banking as well, because you're offering north
Speaker 1: to four percent and it's among the most attractive rates
Speaker 1: in the industry. What does this mean in terms of
Speaker 1: your ambition to pull more money in after you've crossed
Speaker 1: the five billion dollar.
Speaker 2: Threshold expected to be here. Thanks for inviting me. And
Speaker 2: by the way, I try to open a few open
Speaker 2: Bank accounts in the makeup room, so I'll come back
Speaker 2: and check soon. So open Bank is a major step
Speaker 2: in our US strategy. Is the perfect example of our
Speaker 2: platform goals where we're building once across the group and
Speaker 2: it's had a fantastic customer reception. You know, we're one
Speaker 2: hundred and fifty thousand customers, over five billion in deposits.
Speaker 2: And what matter is is that this is great for
Speaker 2: our shareholders too, because it's lowering our cost of funds
Speaker 2: allows us to grow faster in our auto landing business.
Speaker 2: So it's you know, great for our customers, great for
Speaker 2: our shareholders.
Speaker 1: What does it mean for your broader strategy in the
Speaker 1: United States and the ambition that is here today?
Speaker 2: So US is a core strategic market for Santander. We
Speaker 2: see a huge opportunity for profitable organic growth and this
Speaker 2: is really important. It has been top three in value
Speaker 2: creation over the last decade for our shareholders and euros
Speaker 2: and very importantly, we are focusing on the businesses where
Speaker 2: we have a competitive advantage and that bring network effects.
Speaker 2: So we see again tremendous opportunity in the United States.
Speaker 1: Can any of that be accomplished through M and A
Speaker 1: or do you think that mostly will be accomplished through
Speaker 1: organic growth.
Speaker 2: Our aim, as as we have said to shareholders, is
Speaker 2: to achieve fifteen percent our OT adjusted at twelve percent
Speaker 2: in the United States this year. We will get there
Speaker 2: and very importantly, Santan that as a group this year
Speaker 2: will deliver return on tangible equity or just mentioning that
Speaker 2: of sixteen and a half close to seventeen percent, which
Speaker 2: is in gold in well, you know, it would be
Speaker 2: the third of the major banks. The big banks in
Speaker 2: the US would be number two or three, I believe.
Speaker 1: So what does this mean in terms of how you
Speaker 1: want to get there? What do you think are going
Speaker 1: to be the biggest profitability lines? And does any of
Speaker 1: the US broader strategy from the Trump administration get in
Speaker 1: the way given the concerns about the macro environment.
Speaker 2: Those are like five questions FINALI so let me just
Speaker 2: first start how we will do it? So for us,
Speaker 2: you know, we set out in twenty nineteen to become
Speaker 2: an open financial services platform and very importantly to do
Speaker 2: things in a way that is simple, personal, unfair for
Speaker 2: our customers. And that is what we now have embodied
Speaker 2: in transformation, which is a structural shift in how we operate,
Speaker 2: so much lower cost to serve, which benefits customers and
Speaker 2: delivers great returns. A great example is our cost income.
Speaker 2: You know, again, the top three banks in this country
Speaker 2: are around I believe sixty percent. The comparable cost income
Speaker 2: for US is forty four percent. So we are as
Speaker 2: competitive or better than most of the banks in the
Speaker 2: United States. And this is great for our customers. And
Speaker 2: one transformation is the way we get there.
Speaker 1: And the second part of the question was really about
Speaker 1: the broader landscape here. With so much focus on the
Speaker 1: US consumer, there is a lot of concern of whether
Speaker 1: the US consumer is going to feel the pressure of
Speaker 1: the terror strategy. Do you share those concerns.
Speaker 2: So we serve about five million consumers in the United
Speaker 2: States and the headline is very clear. The US consumer
Speaker 2: is resilient and the behavior is as good as we
Speaker 2: expected this year. So there is a normalization of cost
Speaker 2: of credit vis a VI twenty nineteen, but more or
Speaker 2: less aligned with twenty nineteen, and what we are seeing
Speaker 2: is pretty good. Now, if you think about sentiment, that's
Speaker 2: another thing. And of course tariffs brings greater uncertainty, and
Speaker 2: so there is a high probability that you will see
Speaker 2: consumers and businesses, you know, getting weaker in the next
Speaker 2: few months. But as of today, US consumer very resilient.
Speaker 1: Over and over we hear about investors starting to get
Speaker 1: somewhat worried about US exceptionalism. Do you think that the
Speaker 1: US is going to still be the place where capital
Speaker 1: flows to the most.
Speaker 2: So, you know, I'd like to answer that question in
Speaker 2: two levels. You know, one is US has grown much
Speaker 2: more than the rest of the world, especially Europe, over
Speaker 2: the last decade. What happens from here onwards, it's a
Speaker 2: relative some game, right markets, you measure one against the other.
Speaker 2: I think the opportunity in Europe today is greater. However,
Speaker 2: we SANTANDERA deeply committed and we will continue to allocate
Speaker 2: more organic capital to the United States.
Speaker 1: Now, I want to read you a quote recently from
Speaker 1: Jamie Diamond, who spoke in Ireland saying that the EU
Speaker 1: in particular has a huge problem at the moment. He
Speaker 1: says that Europe has gone from ninety percent US GDP
Speaker 1: to sixty five percent over the last ten to five years,
Speaker 1: ten to fifteen years. That's not good. He said, you're losing.
Speaker 1: What do you have to say to Jamie Diamond.
Speaker 2: So most of the time I agree with Jamie, he's
Speaker 2: done a great job. But in this case I don't agree,
Speaker 2: and I think in Europe the opportunity is huge and
Speaker 2: there's only upside right now. Europe has strong fundamentals. You
Speaker 2: know that to GDP is better strong institutions, so strong fundamentals. Second,
Speaker 2: not all of Europe is the same same way that
Speaker 2: Texas is not the same as California or Montana. Right,
Speaker 2: Southern Europe today has higher growth than most of the
Speaker 2: United States, with very great opportunities to grow, but last
Speaker 2: and not least. You know, in terms of relative valuation,
Speaker 2: if you look at banks, you know we have an
Speaker 2: rot year as a return of close to seventeen percent.
Speaker 2: We're treading at eight times earnings, whereas the top three
Speaker 2: banks in the United States are trading with similar average
Speaker 2: returns at twelve to fourteen. So I think this shows
Speaker 2: why there is a big opportunity to invest in Europe,
Speaker 2: and I believe that is something which you know, it's
Speaker 2: not just the banking sector, it's in other sectors. Just
Speaker 2: need to choose your country, your sector, and your company
Speaker 2: the right one.
Speaker 1: I want to get your view on something large that's
Speaker 1: happening in the United States right now, because I know
Speaker 1: you've been thinking about how technology is going to change
Speaker 1: the business. It's the stable coin legislation that is close
Speaker 1: to passing. How is something there thinking about stable coins
Speaker 1: and how you might adopt it in the future if
Speaker 1: you will adopt it.
Speaker 2: So, we don't see stable gone as a revolution. We
Speaker 2: see it more as an evolution, and we believe that
Speaker 2: it's critically important that you have responsible players and that
Speaker 2: it's regulated the right way, as I believe it will
Speaker 2: happen here in it United States. You need responsible actors
Speaker 2: like banks that bring compliance, trust and scale, and so
Speaker 2: I do think it has benefits in terms of being
Speaker 2: globally interoperable, you know, fast efficient, you know, bank rails
Speaker 2: actually can get you there. Also, like if you use
Speaker 2: how Global Payments API, but it's only now sunkander countries.
Speaker 2: This is global, So I do think it's you know,
Speaker 2: there is an opportunity. However, it is in new currency,
Speaker 2: and so you have to make sure that you understand
Speaker 2: the risks. It is in new currency and has the
Speaker 2: risks of a currency.
Speaker 1: What are the biggest risks? We hear time and time
Speaker 1: again that because stable coins have the potential to hold
Speaker 1: so much by way of you as treasuries, that there
Speaker 1: is a potential as as market grows over time that
Speaker 1: it could create some sort of systemic risk. Do you
Speaker 1: worry about that?
Speaker 2: Well, right now it's pretty small, so I don't think
Speaker 2: that's a systemic risk at this time. I do think
Speaker 2: if it grows, it's important that you're in the hands
Speaker 2: of again trusted institutions that are compliant under standard risks
Speaker 2: unmanage the risks appropriately.
Speaker 1: Now before I let you go, Also, I want to
Speaker 1: get an update because you made a lot of news,
Speaker 1: A lot of attention was drawn when you had hired
Speaker 1: teams over from Credit Suite to build up your investment
Speaker 1: banking franchise as well. Where does this fit into the
Speaker 1: broader strategy of Santander.
Speaker 2: Well, as I was saying before, one transformation is the
Speaker 2: way that Santander is delivering on the open financial services platform,
Speaker 2: and the corporate bank was one of the first that
Speaker 2: we started to transform. The corporate bank at Santander has
Speaker 2: twenty percent returns. It is serving our customers in our footprint,
Speaker 2: and the team that we have brought in New York
Speaker 2: is helping us actually take advantage of those corporate relationships
Speaker 2: and give them access to the deepest market in the world,
Speaker 2: which is the US capital market. So it's a win win,
Speaker 2: It leverages our network and it's delivering great profitability.
Speaker 1: How can US clients expect you to be using technology
Speaker 1: more as you grow the bank in the United States?
Speaker 2: So again, part of the one transformation is open bank.
Speaker 2: Open bank is built on our own tech, our own platform.
Speaker 2: It's scales. We have the biggest Open Bank is today
Speaker 2: the biggest digital bank in Europe. It's up and running
Speaker 2: in Germany, in Iberia, in Mexico and the United States,
Speaker 2: and we believe that this will again be a big
Speaker 2: value add to US consumers. And it's only the first step.
Speaker 2: We have more products coming in the next twelve months.
Speaker 2: You will be able to bank with open Bank all
Speaker 2: your basic banking needs.
Speaker 1: Anna Bottein, Executive Chair of san Tandeerra, thank you so
Speaker 1: much for joining us while you are here in town.
Speaker 1: Of course, a lot of changes happening and new products
Speaker 1: being launched. We will keep an eye on all of that.