Santander UK float rocked by chief’s exit

SANTANDER faces an uphill struggle to float its UK operations successfully on the London Stock Exchange next year, after chief executive António Horta-Osório’s shock defection to Lloyds Banking Group.

Santander – which last night confirmed it had appointed Ana Patricia Botín, daughter of veteran group chairman Emilio Botín, to replace Horta-Osório – confirmed last week that it would float a 20-25 per cent stake in its UK business in a deal which could value the entire entity at up to £20bn.

That valuation, and the timing of the IPO, has now come under threat from the departure of Horta-Osório, who has built up a large investor fan base while at the helm because of his smooth handling of the integration of Abbey, Alliance & Leicester and Bradford & Bingley.

“This would appear poor timing for Santander, which might struggle to IPO [with] an unfamiliar chief executive,” said Bruce Packard, an analyst at Seymour Pierce.

Horta-Osório confirmed yesterday in a conference call with Lloyds management that Santander was aware that he would resign prior to announcing its IPO last Thursday.

Sources close to the bank yesterday said the flotation would go ahead as planned, though some hinted that it may have to be delayed in order to put the group on a more stable footing before submitting it to the mercy of nervous investors.

“Santander’s board said last week that they intend to do the IPO in the early part of next year, but they were building in some flexibility anyway with regard to market conditions,” one said.

“That flexibility will clearly remain in place with regard to the chief executive’s departure.”

ANA PATRICIA BOTÍN
INCOMING CHIEF EXECUTIVE OF SANTANDER UK

WHEN Ana Patricia Botín, the Spanish ice-queen daughter of Santander’s group chairman Emilio Botín, steps up to become chief executive of Santander’s UK operations, she will become the first female boss of a large City bank.

Far from using her father’s influence as a crutch to help her up the career ladder, Botín has built a reputation for being a ruthless businesswoman in her own right.

Ranked 38th on this year’s Forbes list of the world’s most powerful women, she studied in the US at Harvard and spent many years working in investment banking for JP Morgan in New York, before returning to Spain to help Santander pursue its notoriously aggressive global expansion.

She has been executive chairman of Banesto, a sprawling domestic Spanish bank controlled by Santander, since 2002 and has increasingly been seen as the natural successor to replace her 76-year-old father at the helm of the group when he eventually steps down.

She is a scion of Spain’s most successful banking family, with her great-grandfather first taking the helm of Santander in 1909.

CV | ANTONIO HORTA-OSÓRIO
1993
Joins the Santander group from Goldman Sachs as chief executive of Banco Santander de Negocios Portugal, the investment banking arm of Santander Totta.

1999
Becomes chief executive of the whole of Santander Totta.

2006
Joins the UK arm of Santander as chief executive, later leading its acquisitions of Abbey, Alliance & Leicester and Bradford & Bingley.

2009
Appointed as a non-executive director to the Court of the Bank of England.

March 2011
Will become chief executive of Lloyds Banking Group to replace retiring CEO Eric Daniels, having stepped down from Santander at the end of 2010.