There’s a wee piece here about how it is possible for a listed company to be successful while being subtantially controlled by a few family personalities, but how sometimes this doesn’t work at all. I don’t doubt the thesis, but the bank Santander is given as an example of the former. That made me think. After all, I was told recently that one of my RBS accounts ‘had been transfered’ (past tense) to the Santander, only to then be told that that wouldn’t be happening after all.
I already knew that Sandanter UK is run by Ana Botin, daughter of the Spanish parent company boss, Emilio Botin. I also remembered reading last year that Santander UK’s parent company had been downgraded by the ratings agencies in the wake of Spain’s continuing economic crisis.
It was widely reported then, of course (try Google News), that the fortunes of the UK branch of the bank were in much better health than the parent company’s, and that UK regulators would ensure that it was ring-fenced from any jiggery-pokery, such as the parent company shoring itself up by somehow sliding cash out of the UK subsidiary at the expense of UK savers.
And yet….. UK regulators were hopeless at predicting the present crisis; that’s clear. So their alertness doesn’t give me total confidence. Moreover, Spain, like Italy, Greece, Belgium and so forth, don’t really have democracies now in the way we’d normally define them. I’m not confident of their institutional provenance at all, as a matter of fact. Spain’s a very new democracy in any case, and this is its first big testing crisis. I’m not sure their own checks and balances are necessarily all they may seem.
Meanwhile, lots of apparently profitable companies operating in the UK seem to avoid UK tax altogether by dint of a parent company getting other overseas subsidiaries to charge the UK subsidiaries for services, thereby rendering the UK operation technically in deficit. I’m not convinced that, or something equivalent, is not possible in the banking sector, whatever the regulators say.
Finally, it seems that if Santander went belly-up, people would only have their first £85,000 protected (that’s a total for savings across all the subsidiaries Santander control in the UK, such as Abbey National). Sure, that’s a lot of money, but some of my constituents occasionally have that amount in the bank following a house sale or redundancy. It’s certainly not untold riches.
So, we have a young democracy ruling once again by decree (rather than a true parliamentary democracy), Spanish institutions of questionable solidity, a hazardous Spanish economic and social context, resurgent Spanish nationalism, a new tendency to defy the EU, smart corporate accountants who can readily move cash away from the UK, UK regulators who have yet to prove themselves following a regulatory disaster. And, er, a struggling parent company whose boss is the Spanish dad of the CEO of the Spanish-controlled UK subsidiary. Oh, and one which describes itself as; ‘the most British of British Banks‘; by the way, this latter piece of bullshit really doesn’t help, Banco Santander.
It’s all making me feel a bit queasy.
I tell you what, if I had a spare £100k, it wouldn’t be going anywhere near The Banco Santander anytime soon.