Santander chief Saenz to fight banking ban

City A.M. Reporter
Spain's Supreme Court barred the head of Santander from working as a banker for three months in an embarrassing blow to 68-year-old Alfredo Saenz and the eurozone's biggest lender.

The ruling is the culmination of a long-running case, centred around a conviction for false accusations against debtors when Saenz headed Santander-owned bank Banesto in 1994.

Saenz will appeal against the ban, Santander said, and it expressed confidence that he would stay at the helm of the bank, where he has been for the past nine years.

"I don't think this is going to kick off any change in the top management structure for the time being. Things looked a bit bleaker for Saenz actually a few months ago when the news first came out," Caja Madrid analyst Javier Bernat said.

Saenz's reputation as a top banker was sealed when he took over the helm of Banesto, the first Spanish bank to be bailed out by the Bank of Spain, turning it around to become one of Spain's best regarded mid-sized banks.

In an unprecedented move, Saenz will ask the government to intercede with the Spanish courts to seek a suspended sentence, Santander said.

Saenz had originally been sentenced to six months and one day of prison in 2009. He has since made several appeals.

The new ruling confirms that earlier verdict, though in less harsh terms, and Santander said Saenz would seek the suspension of his sentence with the Barcelona court that handled the original case as early as next week.

One of the five judges involved in the case had called for Saenz to be absolved.

Markets have largely ignored the case, and while Santander's shares, down 2.4 per cent, were underperforming the European bank sector, analysts said the fall was largely due to a downgrade of Spanish sovereign debt by credit rating agency Moody's.

Santander has aggressively ramped up its size through a slew of acquisitions over the last decade, and Saenz is widely seen as a good complement to flamboyant chairman Emilio Botin, the driving force behind the acquisitions.