Santander Bank prepares new structure for next crisis

santander2 Santander is dividing its banking empire into nine autonomous groups, with Portugal being one of them.

Preparing for the next crisis, the Spanish bank, run by Ana Botin, aims to create a more robust geographical structure should one of the new regional businesses suffer insolvency.

These legally autonomous divisions will deal with the controlling central banking regulators in their areas and wqill work with them to devise any necessary ‘resolution’ without affecting the overall business.

Each new ‘resolution group’ will have to meet specific criteria, including capital ratios, should have enough resources to keep itself out of trouble and is under no obligation to bail out other of the regional Santander businesses.

“There are no legal commitments that imply financial support,” reads a company notice, adding that inter-company loans will be at the applicable market rates.

The group in Spain will be the largest one, with assets of €651 billion.

In order of decreasing assets, the remaining units will be: United Kingdom (€361 billion), Brazil (€162 billion), the United States (€114 billion), Mexico (€58 billion), Chile (€50 billion), Portugal (€48 billion), Poland (€32 billion) and Argentina (€13 billion).

The Spanish group also has the highest solvency, with a capital ratio of 24.12% compared to the Portuguese business at 18%.

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