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

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

One thought on “Santander – a name to bank on, if not to love

  1. Walter Ellis

    It is ironical that Banco Santander should have emerged largely unscathed from the financial meltdown of 2007-2009. Spain’s economic collapse was the worst among the larger EU nations, exceeded relative to size only by Ireland and Greece. The Spanish property bubble burst to spectacular effect, leaving the country, particularly its densely populated coastal regions, strewn with hundreds of thousands of unfinished or unoccupied villas and apartments, many of them without basic services and reachable only by dirt roads.

    Banco Santander, as I understand it, steered clear of unsecured mortgage lending and was thus left with a positive balance sheet when most of its rivals were putting out the begging bowl.

    But what has Santander done now? It has has moved in a big way into the famously volatile British property market, which, having fallen sharply in the last three years is now on the turn and building towards its next bust.

    Will the Spanish giant, having avoided the Crash of 2008, now become a central player in the anticipated Crash of 2020? Mesdames, messieurs, faites vos jeux!

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