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The Santander Reconquista

by Tricia

I am keeping a very close eye on Banco Santander's decision to sell off its perfectly healthy asset management business.

Whoever buys Santander Asset Management will inherit a profitable business and a sure foothold in a truly global business. Santander is rumored to be talking to US firms that could design products for them -- very specifically dollar funds for the Latin American market (Santander retail banks, along with BBVA, led what we call the "Reconquista" of Latin America following the liberalization of financial services circa 1999, and retain dominance in the key markets). Banco Santander would likely retain control of distribution through its retail branches. I've heard Franklin Templeton, State Street, and JP Morgan, but I wouldn't want to spread any rumors.

Santander, based in Spain, is Europe's biggest bank by market capitalization. Its balance sheets remain quite healthy despite a recent slowdown in the Spanish economy following about ten solid boom years. I've heard valuations between 2.5-3 billion euros.

Also earlier this month, Santander bought Alliance and Leicester to round out is purchase of Abbey National in 2004. (I've always thought of this as revenge for the defeat of the Spanish Armada). Analysts are wondering if the sell-off signals intent to buy another retail bank, strengthening Santander's core business. I can't wait to find out who the lucky suitor will be.