Ana Botin Executive Chair Santander: Future of banking, inflation and women in finance

I'm Nicolai Tangen, the CEO of the Norwegian Submarine Wealth Fund.

In this podcast, I talk to the leaders of some of the largest companies we are invested

in so that you can learn what we own and meet these impressive leaders.

Today I'm speaking to Anna Botin, Executive Chair of Santander, one of the world's largest

banks, with over 160 million customers and over 200,000 employees.

We own over 3% of Santander, translating into 16 billion kroner or 1.6 billion US dollars.

Anna Botin is one of the most influential people in global finance.

Who'd have stopped?

You for sure don't want to miss this one.

Big thank you, Anna, for taking the time today.

You are one of the leading names in European banking and the fourth generation of your

family to lead the bank.

So was it always a dream of yours?

No, absolutely not.

You know, I had like two stages.

First when I was very young, I wanted to be a pro golfer.

I loved golf.

Then when I went to university and before I actually joined J.P. Morgan out of university,

I thought I wanted to be a journalist or a spy, believe it or not.

I thought that was a great way to travel and know the world, understand what's going on.

And I joined J.P. Morgan because in the 80s, that was a good place to be, actually.

So no, I didn't always want to be a banker.

Well, I never asked him the question, to be honest.

And he actually asked me to leave the bank at one point when we merged with Central Hispano.

Then he asked me to come back.

But no, we never discussed that.

There was never any pressure at all.

I was living outside of Spain between the ages of 13 and 30.

So the whole family sort of atmosphere and so on was not such a big driver in me wanting

eventually to join Santander.

dinner table, how do you think that impacted you?

finance, but all started working in banks.

Now they're all working in non-banks, even though they're in finance, interestingly

enough. So even though you don't realize it, it probably does sort of sink into you in

a way that then obviously helps you or motivates you to be in the business.

So yes, absolutely.

But I think that was much more obvious to me when I joined Santander, because I used

to spend weekends with my parents.

And so that's when I was surrounded, not just during my work day, but in my weekends

and time off, I was surrounded by banking and finance and what's going on in the world

and in the bank.

So I think that's when it really had a big influence on me.

It was when I was already working in the bank.

considerations than profits?

more power, you have more responsibility.

And I've always, since the first day I worked at Santander, but importantly, when I was

running Banesto or Santander UK and then the group, I've always said that I care as

much about how we make the numbers as well as doing the numbers.

So I do want the numbers to be delivered, but I want them delivered the right way.

I think that is absolutely crucial.

And that is the best thing for our shareholders, by the way, not just good for society

and for the planet in the case of climate and inclusion and so on, but it's also the

best way to make the business sustainable in time.

And I'm very proud that Santander has been around for 165 years and I'd like it to be

around for the next 100 years.

in the UK, is do things in a way that is simple, personal and fair.

So those are the three words that each one of us at Santander turns to when there's not

a manual. And it has to be simple and personal and fair for all our stakeholders, our

team, our customers, our shareholders, our communities, the planet.

So yes, those are the three words that should and do make us different from other

But so, you know, first, not just European banks, but banking, the regulated banks in

the world are today much more solid.

We have three times more capital.

We went from two trillion in the global banking system to six trillion.

We have a much stricter supervision, especially the bigger banks in the world and in

Europe. That goes down to very small banks, actually.

So in that sense, the financial system is very solid.

On the other side, it's suffering.

It's suffering first from lack of growth.

If you look at the growth in Europe vis-a-vis the US in the last decade, it's a

fraction. I mean, it's a third of what it's been in the US.

Second, also from the lack of integration, we do not have a single market.

And so that is a big tax on banks, a big tax on people, a big tax on corporations and on

society. So this lack of an integrated market is really a high cost for all of us.

And third and very important, of course, is the fact that we're in a one in a hundred

years disruption time.

I mean, what is happening to our customers in every sector, not just banking, in terms

of how they relate to us, it's a huge difference that sometimes the last ones to see

it are those inside the sector.

So which means, of course, that some new business models are overtaking in every single

sector, the incumbents.

This is especially true in banking and accelerating.

So that means, of course, that evaluations have suffered in general for all these

I mean, we have PE taking the corporate credits.

We have some of the consumer companies taking deposits.

So why do we have that?

Do we need the banks?

The question is, do you need them as they are today or do we need them as customers

want us to be?

So if you ask a banker, you know, a current account is still the same as it was before.

If you ask a customer, it's a totally different product.

Let me use an example.

I'm sure you still have at least I still have in my home DVDs.

I mean, I'm watching a movie in a DVD.

I'm watching a movie in Netflix.

Is it the same?

I am sure you agree it's radically different from a customer experience point of view.

Same happens to banks.

We think that buy now, pay later is the same as consumer lending.

It isn't. It's a very different product.

So we need the banks to and this is what Santander has been investing and we're now

delivering on that transformation.

We need to understand that customers need and want our products in a very different

way, in such a different way that it's actually a different product, even though we

might think it's the same.

primary and the board and my team's primary responsibility is ensuring we're safe for

our depositors and that we also can support what is our mission to help people and

businesses prosper.

So we need to make sure we do both of those things.

And I'm very proud that Santander is always has consistently been the best in stress

death. We have one of the lowest CDS in the world, very close to JP Morgan and so on.

We have been successful in going from DVD to Netflix in the corporate bank, in the

wealth management, in payments, well ahead of many of our peers and can spend some time

on that because it's existential to our business model that we continue to be at the

heart of our customers' payments.

We've done a lot of progress in auto, digital consumer bank, and where we have

really a lot of work to do and that's our focus and that's where we need to go faster

is in the retail commercial bank.

And so that is really what we told the market in February and I think was well

received that our reinvention has to now extend.

So we are really running a group where our global scale is helping us to be the best

in each one of our markets, including in the retail commercial part of the business,

which is, you know, more than half of Santander, 60 percent.

I think if you look at the trends in the world, you know, net net and of course the

digital AI and there's a couple of deflationary trends, but most of the trends right

now are inflationary.

So I do think they will earn, as will the Fed, on the side of going a bit too far.

I think they're doing a good job.

I think, as I always say, they have all the data, all the information.

I'm not going to double guess what they're doing.

But I have learned from a long time, you know, 30 years in LATAM, that it's difficult

to kill inflation without having positive real rates.

And, you know, maybe we are there with core inflation, depends on the countries in

Europe. So I do think it's going to be higher rates now for longer, the same way we

had lower for longer. But I think they're doing a good job and inflation has to be

contained if we want to get back to sustainable growth.

I mean, you are very large in South America.

What are the big opportunities for you?

Anything that doesn't go forward goes backwards.

And I do think Santander has a very unique differentiator from many of our peers

globally in at least Europe and the US, which is we have growth and we have growth

mostly because of Latin America.

We are, you know, the leading bank, number one bank in LATAM.

We're number one in auto finance.

If you take the continent as a whole, we've added 40 million customers the last eight

years. And we are saying we're going to add 40 million customers the next three years

because we are in LATAM.

Brazil, Mexico together have, you know, 340, 250 million people and they're, you know,

increasingly well off.

So, again, growth.

It's very important also that we have managed to make these countries profitable.

Each one of our banks in LATAM is and has been, in the case of Brazil, number one for

the last two or the last three or four years.

Mexico is the second or third, but getting at, you know, very high levels.

So it's profitable.

It is very important for us also that we're able to bring into the financial system new

new people. We have reached our financial inclusion targets because of Latin America.

You know, two years early, we 11 million people, we included in the financial system.

We've increased that target also.

So it brings us, again, profitable growth.

It gives us also scale, a scale that we can then use to benefit Spain, UK, US and other

countries. So it's a combination.

Again, we mostly lend money, our risk in terms of balance sheet is mostly in Europe and

US, but a lot of our growth and our higher profitability today is in LATAM.

Have you got a uniform copper culture across?

develop over the last few years.

Again, we share, we grew very fast in the 90s.

And so when I took over, I would say we were quite far away from having a common

culture. You know, almost nine years after, I think we are in a much better place and

it's essential for the change that we have been able to achieve.

How do we work as a group while ensuring that our local country leaders have

accountability? And this is something which we cannot lose, but we need to do both.

I think we have a probably a very Latin corporate culture, but we absolutely, you

know, I'm in London today.

Our colleagues in the UK feel absolutely part of Santander, our US the same, Poland the

same. So, no, I'd say we have a, you know, of course, our origin is Spanish and I don't

think we want to, well, we don't want to lose that because there's many positives, but

it's a combination of the whole group.

As a matter of fact, the Simple Personal Affair was born in the UK, so it's not a

Spanish. And that for us is really important.

The Simple Personal Affair is what every, and we ask our colleagues around the world,

it's absolutely something we all believe in.

We are very, and that is in a way good because of the medium term.

So I believe our culture is less focused on, of course, we want to deliver every

quarter, but we also want to deliver in the long term.

And I think that is partly from the sort of more Latin culture way of thinking.

It's outspoken.

It's very direct.

I think that is also something which we want to do even more of and sometimes we

struggle with. So I do think it has differences from other cultures.

Now, again, it's not the same.

And at the end, it's a fusion of every country that belongs to the Santander world.

But I'd say speaking up and being also medium term, long term oriented is some of

the differences.

So, you know, I love England, but speaking up is not exactly what they do most of, is

it?

You know, the UK is not all the same, right?

You have Scotland, you have the Scots, the Welsh, the Irish.

I learned that when I was here.

So every country, you know, even Spain, you have the Catalans, the Basques, some have

Basques, you know, Southern Spain is different.

You know, it's very much what the leaders do.

And I believe that by, you know, our leaders in general, and I'd say all of them now are

very much of the speak up kind of people that we want across the company.

It is very important.

I once, many years ago, had dinner with a CEO of a big American bank.

And he told me, you know, one of the reasons that speaking up is so important is that if

people try to, you know, fix the problems and then escalate them, by the time they get

to the top, they become huge.

And so you want people to give you a heads up and then, of course, make sure that if

they can, they can fix it.

But we're aware and we can manage in the right way.

So we've been very, very focused on that and ensuring that in the countries, and it was

not all the same when I took over, that we're really much better at escalating issues so

we can, you know, solve them together or at least be aware that we have a problem.

Is it more difficult to run a Latin culture?

So for me personally, I find it, you know, as long as I can communicate and I've been very

upfront about having everybody share a common language, which, of course, is English.

I feel very comfortable with all the cultures where we operate.

At the top of the financial industry?

world. I was recently at a meeting with central bankers and I have to say there was, there

was a global meeting.

I believe there were three out of thirty five were women.

One of them is my boss.

OK.

OK.

Head of the Norwegian Central Bank.

She's a chair.

And I, I'm trying to do as much and not enough, I have to say, as I can to make sure

that, you know, it's much easier at the board level to, you know, to get to reasonable

levels. It's obviously much harder when you want to make sure that you have a meritocracy

and you give everybody a chance in your organization.

So we have set targets and we are going from 20 to 30 percent of women in senior

leadership roles in, I think, five years, six years.

You know, there's a number of reasons.

One is, one is, and there is a lot of evidence in this that, let me just give you two

that are proven.

I've seen lots of studies on this.

One is that women do not put themselves forward for a new role, you know, for a

more senior role unless they're more than 100 percent qualified.

Men tend to put themselves forward when they're 30, 40, 50 percent qualified, which is

great. So, you know, one thing we're working on is how can we give women the confidence

to actually come forward and say, yes, I want to have a chance of getting that new job.

And this happens across industries, not just finance.

The other one is what they call the maternity tax or paternity tax in some cases, but

it's mostly women that obviously pay the price.

We've seen that in many cases.

So careers are very parallel between men and women until you have a family.

And then the woman tends to have most of their or assume most of that responsibility.

And then the gap goes like this.

Right. So, again, how can we get around those issues?

You know, mentoring, having support for the families.

And by the way, I know even in I was in Denmark two years ago meeting with our leaders

from the Nordics, exactly the same issue as in the Latin countries.

I mean, it's not just at least in finance, because I met with all the senior women again

in Copenhagen and it was not very different from what I heard in, you know, in

Sao Paulo, Madrid or other places.

So so it's a universal issue that we need to we need to fix.

in New York, including in the trading floor.

You know, it was a very absolutely a man's world at the time.

The trading floor, there must have been three women out of 100 or something.

I mean, very, very few women.

So I was accustomed to dealing with men, usually much older and all the same.

But now it's the opposite, I guess.

who'd been in the bank for a long time, he was absolutely a key, in this case, mentor

for me, if I may call him that.

Our lead director, Bruce Carnegie Brown, is an amazing sounding board.

He's sort of my boss.

And I absolutely, you know, talk to him every time there's an important decision and get

his advice. And even on people issues and so on, I like to get lots of opinions.

But I have three or four that I tend to reach out more than.

Hector, my our CEO here at Santander, he and I speak, you know, constantly, almost

every day and consult each other, too.

We are very much a team.

make a mistake, fix it fast.

When you find that somebody is not up to the job, you know, mission first.

That to me is really important.

You know, mission first.

Sometimes we are scared about moving people or making decisions that you know are right

because, you know, mission first and try to mitigate the risk and make those decisions.

I think making decisions in a timely way is absolutely crucial.

who is your role model here?

Which leader really impresses you?

In our sector, Jamie Dimon is sort of the person who's done a great job.

He's been there for a long time.

At another level, my grandfather, he's the one who took Santander from being in the 50s,

from being a very small bank in a region to being a national bank.

He took a big step by buying his competitor much larger than him.

And one of the things he often said is he was asked in an interview,

so how have you been so successful?

And his answer was just one word.

He said time.

He was asked the question three times and he said it three times.

Time. It takes time.

And I think that is really important.

Of course, we need to deliver and we need to deliver every year.

And that I have very clear.

But if you want to build something great, it takes time.

And. To me, he was also a role model.

Would you mind just elaborating a bit on that?

Yeah. Well, it was mission first.

That's exactly how he thought.

And he did the right thing for the bank.

Was it nice for me?

No, it wasn't.

But he did the right thing for the for the bank.

And I think that's what matters.

So a bit of the learning from this is interesting.

You bounce back. You came back.

You took over the UK operations and you then took over the whole bank.

You know, wow.

I was asked after three years where I set up my own private equity fund.

I set up two foundations.

I set up a tech company in the Internet boom of the year 2000.

I was actually doing pretty well for myself economically,

much better than what I was then offered when I came back.

But what's important is that I came back to Rambanesto

and I was asked to do that from one day to the next.

And I said, yes. And why did I do it?

Because I realized that, you know, if I wanted to do something more

than just doing well economically for myself, if I wanted to have an impact,

you know, running a bank was an amazing way to do that.

And having that chance doesn't happen all the time.

And I thought it was worth it.

So so I did come back to Rambanesto.

But I learned a lot in my three years, you know, running my own businesses.

I mean, you mentioned you're a golfer.

I believe you do yoga.

You're interested in art.

What is your what is your favorite thing?

And I must also add, I think your art museum

exhibited the collection of my fellow Norwegian Alinkage at some stage.

I also enjoy skiing.

I enjoy, you know, trekking and hiking in the mountains.

I love that.

But golf for sure. Golf has helped me a lot in my career.

It's allowed me to develop relationships with mostly men, actually,

who run the world and business in general still today.

And so that has been great because I can do something I love.

And at the same time, it's it's good for business.

Alinkage, yes, I met him.

He's great, by the way.

I highly recommend his books.

You know, Silence is one of them.

And he has a couple of really good books.

We had great conversations when he came to Madrid.

His his collection was very, very appreciated by all the viewers here in Madrid.

And I love art.

Yes, the Family Foundation, the Botin Foundation has.

So Alinkage was at the Bank Foundation.

Yes. Yeah, we do an exhibition every year of countries

where we have a presence and we we did his.

What what what are the two books which have made the most impression on you?

that I'm finishing now, which is unbelievable, which is about the

when it's actually the Muslims in Spain,

the Arabs in Spain that were there for 800 years,

even though really in most of Spain for only 300.

But it's really interesting to to to.

It's a very well written book.

I highly recommend it where, you know, and the reason I'm reading is

because everything that's going on in the world in terms of geopolitics

and, you know, us coming apart instead of coming together.

And it tells you about how, you know, Muslims, Jews and Christians

were able to coexist.

It also tells you the problems there were.

So I think it's really interesting

story about something that happened

and that is in a way happening again at different levels.

You know, I read many books.

The one that I am very interested in now is

not longevity, but health span.

How can we actually live better for a longer time?

How can we, as we get older, be healthy and in good shape?

Because that's the only way to be in a good, you know,

to be productive and ultimately happy. Right.

I mean, I don't I recommend the book I'm reading now.

I'm finishing called Outlive by Peter Attia, ATTIA,

which is very interesting.

So I've gone through cycles in this.

So I'm in the cycle.

So I used to think it was critical to find time for sports

and doing cardio activities.

Then I was a big believer in if you have to prioritize,

because obviously you don't have time to do everything every day,

especially when you travel overseas and so on, sleep.

I'm now back to cardio again.

So, yeah, I now think doing, of course, if you don't sleep a minimum,

you cannot exercise.

But I do think doing cardio exercise is absolutely key

for your health, both physical and mental.

listening into our podcast.

What is your what is your advice to young, ambitious people?

opportunity and flexibility are three key things to bear in mind.

Balance, because you cannot you know, it's been said many times

you cannot have it all at the same time. Right.

You can have it all, but not at the same time, whatever you like it.

So I think having a balance, you cannot, you know, if you're working

and have a family at some point,

you have to give up on your friends and hobbies for some years

and so on and so forth.

So finding that balance, which is different for each one of us

at different times, very important.

The second is flexibility.

And this I learned by living outside of my home country

for many years and having to, you know, in countries and places

where I was just one more person, nobody knew where I came from.

So learning to adapt to different cultures.

You asked the question before.

I lived in seven different countries before the age of 30.

Now, of course, you don't have to do that to be flexible,

but being flexible, understanding, being able to and then opportunity.

I mean, you never know when something is going to happen that is good for you.

And again, if you get the opportunity, as I did, to come from a family

that was able to give me a good education,

you get the opportunity to go back, as you were asking before, to the bank.

You know, you have to be ready to take it.

So to me, those are three things that are incredibly important in life,

or at least they have been for me.

It's been really great talking to you.

Big thanks and safe travels.