Santander, the Spanish bank, has announced the appointment of Pedro Castro e Almeida as the regional head for Europe, highlighting the region as a key driver for future growth. Castro e Almeida will be taking over from Antonio Simoes, who has been selected as the new CEO of Britain’s Legal and General Group.
Responsibilities and Scope
In his new role as regional chief, Castro e Almeida will oversee Santander’s operations in Europe, including its businesses in Spain, Britain, Poland, and Portugal. The bank has emphasized its task of leading the transformation efforts in the region. Castro e Almeida will report to Santander’s CEO, Hector Grisi while continuing to serve as the CEO of Santander Portugal, a position he has held for the past five years.
Shifting Focus to Europe
Historically, Santander has relied on Latin America for growth, leveraging it to counter the challenging conditions faced by European banks since the 2008 financial crisis. However, with the current economic climate and the gradual increase in interest rates, banks across Europe are starting to experience benefits. Notably, in the first quarter of 2023, Europe emerged as the largest contributor to Santander’s earnings among its core regions, which also include North America and South America. Europe witnessed a significant 17% year-on-year increase in Santander’s first-quarter net profit, amounting to approximately 1.2 billion euros ($1.30 billion).
Ambitious Growth Strategy
Santander’s February strategy update outlined its plans for the business in Europe. The bank aims to achieve an annual accumulated growth rate of between 7% and 8% in revenues for the period between 2022 and 2025. Additionally, Santander targets a 15% return on tangible equity ratio (ROTE) for Europe by 2025, compared to 9.28% at the end of 2022. This indicates the largest increase in percentage points among Santander’s three core regions.
Effective Date and Transition
Pedro Castro e Almeida’s appointment as regional head for Europe is set to take effect on September 1, subject to customary approvals. Meanwhile, Antonio Simoes will continue to serve in his current position until then.
Conclusion
Santander’s selection of Pedro Castro e Almeida as the regional head for Europe signals the bank’s strategic focus on driving growth in the region. With Europe already contributing the most to Santander’s earnings in the first quarter of 2023, the bank aims to capitalize on the improving economic conditions and higher interest rates across the continent. Castro e Almeida’s extensive experience as CEO of Santander Portugal will be crucial in leading the transformation efforts and achieving the ambitious revenue growth targets outlined in the bank’s strategy update.
