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Santander to roll out new platform in US, globally - Botin

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Hiring in US CIB starting to pay off, exec chair says

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Spanish bank recently became most valuable lender in euro

zone

By Jesús Aguado, Tommy Reggiori Wilkes and Elisa Martinuzzi

LONDON, June 12 (Reuters) - Spain's Santander

plans to make the United States the launch pad for a revamped

platform serving consumer customers that it will roll out

globally, Ana Botin, Executive Chair of the euro zone's biggest

bank by market value told Reuters.

Santander, which relies on 10 key markets for the bulk of

its business, wants to use its third-biggest market by revenue,

the U.S., to build its own technology platform for consumer

banking, including digital-only banking and consumer finance.

It will then adopt that platform across its retail and

commercial operations globally, which account for nearly half of

Santander's overall profits.

The bank is in the middle of a transition from older

technology to modern cloud-based IT infrastructures and the new

platform is part of a wider strategy to extract savings and

boost profits with better technology and lower funding costs.

"Our goal is to build a common platform for our retail and

commercial business, using our own technology. It is coming

together in the U.S. this year, but we'll be slowly, but

steadily rolling it out across our footprint," Botin said.

Santander has not revealed the costs of the platform

migration but has said it has already saved 237 million euros

since 2022, with 50 million euros alone in the first quarter,

thanks to technology upgrades.

Santander's U.S. investment reflects its preference for the

Americas, where it sees higher growth potential than in more

mature European markets. Therefore, even though Botin expects

more consolidation in European banking following arch-rival

BBVA's shock hostile bid for Spanish peer Sabadell

, Santander does not plan on being part of it.

The bank will launch its digital Openbank - which already

serves more than 2 million customers across Europe - in the U.S.

and Mexico later this year.

"In the U.S. we are starting with a high yield savings

product as by raising deposits outside of our existing footprint

we can expand our customer base and replace the more expensive

wholesale funding for our auto business," said Botin, who took

the bank's helm in 2014 after the death of her father.

"We will then offer other products and services over time,"

she added.

Santander, like other banks, has benefited from higher

interest rates, but growth in its key Latin American markets has

given it an edge over more European-dependent rivals that have

scaled back their presence in the Americas.

BBVA quit the U.S. market in 2020, spending the proceeds on

share buybacks. HSBC ( HSBC ) and BNP Paribas also sold their

U.S. retail-focused operations.

Thanks to a 23% rise in its shares this year, Santander

recently overtook BNP Paribas to become the euro

zone's most valuable lender.

It has promised that the recent roll-out of its five global

units - retail, consumer, payments, wealth, and corporate and

investment banking - will make the bank globally simpler and

more efficient.

A successful launch of a fully digital offering in the U.S.

will be crucial because Santander's U.S. business has been

generating subpar returns and caused some headaches in the past.

Its subprime auto lender in 2020 agreed to make changes to

its underwriting practices as part of a $550 million settlement

over subprime loans it had made.

In the first quarter, Santander's U.S. business reported a

return on tangible equity ratio of 7.98%, against 14.9% at group

level.

Hiring expenses and higher provisions caused a 6.8%

year-on-year fall in U.S. first quarter profits.

Santander has hired around 200 staff for its corporate U.S.

bank and Botin said the new hires - many of them well-paid

bankers from collapsed bank Credit Suisse - were already

bringing in more business.

"What the new team give us is the ability to support those

clients with other fee-based services. And it is already

starting to pay off," Botin said, adding that headcount

expansion was largely done.

CONSOLIDATION

BBVA's bid for Sabadell, Nationwide's play for Virgin Money

in Britain and some supervisor and lawmaker comments

have revived expectations for more consolidation in the

fragmented European banking industry.

Botin said she expected more deals, though national rather

than cross-border.

"I think there will be more M&A. It's going to happen in

Germany. It's going to happen in the UK. It's going to happen in

Italy," Botin said.

"But I don't see that much cross-border because it is far

harder to justify the investment as, among other reasons, euros

are effectively ring-fenced at a national level," she added.

Right now banks in the euro zone cannot raise deposits in

one country and lend them out in a different country.

European cross-border banking deals are rare. Hurdles

include differing regulations and labour laws, the lack of a

euro zone-wide deposit insurance scheme and political

resistance.