MADRID, LONDON | Emilio Botin will be re-elected on Saturday as board director and president of the Spanish financial group, currently third in the domestic rank after Caixabank and BBVA. But he got today a special gift via London: Banco Santander was named ‘Business Bank of the Year’ in the UK at the annual Business Moneyfacts Awards for its strategy to become the small and medium-sized companies’ bank of choice. It was the fourth consecutive year Santander has won trade recognition.
Meanwhile in the Spanish city of Santander, Emilio Botín led the bank’s annual general meeting, which approved the 2011 accounts. Botín reminded shareholders that 2011 had been marked by a very difficult economic, financial and regulatory backdrop.
“Banco Santander maintained its strategy of giving priority to strengthening its balance sheet, in terms of capital, liquidity and provisions, and generated net attributable profit of €5.35 billion, 34.6% less than in 2010,” he said.
Botín noted that the bank decided to set aside non-compulsory gross provisions of €1.81 billion for real estate assets, bringing coverage of real estate property in Spain to 50%.
“These provisions, together with the partial write-down of goodwill at our bank in Portugal, reduced net profit for 2011 by €1.67 billion. Without them, net profit in 2011 would have been €7 billion.”
On the day after the second general strike staged in the country during the credit crunch crisis, Botín said the steps the government is taking are
“very tough in the short term, but vital for the future.” He said the financial reform package is “a very important step to clean up the sector. It is fundamental to restore investors’ confidence. This is why the country’s new banking map should be finalised before this summer.
“I would like to highlight the exceptional effort, unprecedented in Europe, that the banks are making to help resolve the problems of the Spanish financial system and, particularly, the problems of some of the savings banks. The new banking environment will be based on bigger, more solid and more efficient institutions […] All this would help restore the flow of credit to the economy.”
He said the labour law reform that sparked yesterday’s protest is “a move in the right direction and, without doubt, will improve the competitiveness of the Spanish economy and, in the medium term, create jobs.”
Banco Santander’s chairman referred to the new credit line of €35 billion offered to regional governments and local authorities to cover payments to suppliers as an initiative that will help improve conditions for small and medium-sized companies.
Botín confirmed shareholder remuneration at €0.60 a share is one of the priorities for the group in 2012. In order to comply with Spain’s central bank rules on provisions for real estate assets, the bank will use a further €2.30 billion, on top of those made against the 2011 results.
