Super-sizing Santander

October 20, 2013

An unveiling ceremony in Manhattan’s Herald Square this week gave New Yorkers a first view of a gaudy red sign that bears the name of a financial services powerhouse.

It says, simply, ‘Santander’.

Mayor Michael Bloomberg was there with Emilio Botin, Chairman of the Santander Group. It was an important occasion for Santander. Similar ceremonies took place in Boston, Philadelphia, Providence and Wyomissing, PA.

It marks it the end of Boston’s Sovereign Bank, acquired by Santander four years ago and, more significantly, the beginning of Santander’s presence in the US market. The red sign will soon go up above 700 branches of what was Sovereign Bank network in nine states in the northeast.

Goodbye Sovereign

Goodbye Sovereign

The global brand hegemony of the Spanish banking group is impressive to behold.

Those oddly anonymous strips of red actually bear the name of a wet, nondescript port city on the northern coast of Spain. Santander is derived from the name of a 3rd century Catholic martyr, Saint Emeterio. Over time it became Santemter, then Santenter and finally Santander (see Namedroppings).

The bank’s history begins in 1857, when Queen Isabel II signed a royal decree authorizing the founding of Banco Santander to capitalize on the trade boom between Spain and Latin America.

A huge acquisition spree has, quite literally, put Santander on the global map. Today it is the largest bank in the Eurozone by market value and one of the largest banks in the world in terms of market capitalization with 186,000 employees, 102 million customers and 14,392 branches worldwide.

In the UK those bright red signs have spread like kudzu on every high street in the land over the last decade. Santander snapped up several of Britain’s most prominent building societies, including Abbey National, Alliance & Leicester and Bradford & Bingley, quickly building up a national network of more than 1,300 retail branches, each of which slot in cheerily between the local Waitrose supermarket and Thorntons candy store.

Not Bank of America

Not Bank of America

The virtue of the Santander name is in its very blandness. Pronounced ‘san-tan-DAIR’ (although it will probably become better known in the US as ‘SAN-tanda’) it could be anything. It certainly doesn’t sound like a bank. And after the financial turmoil of the last recession and the bailouts that’s a good thing. People are still wary of big banks.

Santander’s rise is the Darwinian way, especially in financial services. Brands ebb and flow like corks on the economic tide. In the US, financial giants Merrill Lynch, Wachovia and Washington Mutual, Bear Stearns and Lehman Brothers were swept away in the last recession.

If the UK is anything to go by Sovereign Bank will be just the first of several Santander acquisitions in the US on its way to prominence. It’s unflashy brand rooted in resolute consistency and customer focus has all the hallmarks of that other retailing giant that got the basics right.

Santander has the global scale, resources and corporate ambition to become the McDonalds of retail banking.

References:

Top 25 US bank changes its name to Santander today

Sovereign Bank Starts Over as Santander


Santander – a name to bank on, if not to love

February 27, 2010

Santander is a port city on the northern coast of Spain. It was known to the Romans as Portus Victoriae Iuliobrigensium, but its present name is derived from that of a 3rd century Catholic martyr, Saint Emeterio (Santemter – Santenter – Santander).

These days the city is noted for nothing in particular according to my friend Dave who lives in nearby Oñati. He says it’s very nice for a seaside promenade if it isn’t raining, as it frequently does, but he much prefers Bilbao or San Sebastian.

And yet the name of  this wet, nondescript Spanish city has become one of the most ubiquitously visible on the high streets of Britain. How so?

Eh?

Santander is also a bank. It took its name from the city in which it was founded in 1857. Having survived the economic maelstrom of the last 18 months in better shape than most if its European rivals, Santander is intent on capitalizing on its good fortune by forging its name into a global brand. Through furious acquisition the bank has become the third largest in the world in terms of profits.

Its entry into the UK was made only recently through a series of acquisitions that focused on Britain’s battered building societies, those uniquely British inventions that began as co-operative savings groups. The first was founded in Birmingham in 1774. By 1910 there were 1,723 providing the British middle class with mortgages to buy houses.

For most of the 20th century these admirable but eminently boring institutions were granite-like proclamations of Victorian thrift and the virtues of home ownership. Their names constituted a national inventory of British towns – Halifax, Bradford & Bingley, Leeds, Yorkshire, Barnsley, Woolwich, Coventry. Just about every high street in the country had a building society branch.

Most are gone. Only 52 remain as independent societies. Many merged to form larger ones after ‘demutualization’ in the 1980s allowed them to change their legal status and operate as banks. They were swallowed up by larger banks such as Santander which acquired the largest, Abbey National, in 2004 quickly followed by the Alliance & Leicester and Bradford & Bingley.

Over the last couple of months Santander has been busy replacing the signs on branches across the length and breadth of Britain. By the end of this year there will be 1,300 buildings in the UK bearing the name of a remote Spanish city.

Aviva enlists Ringo to sell name change

What the man-in-the-street in Bingley will make of the name change remains to be seen. Britain’s largest insurer, Norwich Union, took no chances when it changed its name to Aviva. It enlisted the aid of Ringo Starr and Bruce Willis in TV ads recently to explain to the British populace why it was becoming Aviva which is not, as you might suppose, a another city in Spain but just a made-up name that better suits the company’s international ambitions.

Such is the Darwinian way with names as industries become increasingly globalized. Rich local diversity is replaced with international bland. Here in the US we lived for a while with a bank called Wachovia, named after an obscure region of Germany, before it was swept away in the recent financial crisis which also saw off the hitherto financial stalwarts of Washington Mutual, Bear Stearns and Lehman Brothers, together with 140 local banks that failed in 2009.

Last year Santander quietly made its first move in the US. It acquired Sovereign Bancorp of Pennsylvania for approximately US$1.9 billion giving the Spanish bank a foothold in United States. Odds on it won’t be long before we too become very familiar with the name of that small, insignificant city in the north of Spain.

Not for long


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