Santander prepares $250mn expansion of investment bank

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Santander has set aside $250mn to turbocharge the expansion of its corporate and investment bank over the next two years, as rivals on Wall Street prepare for some of the biggest job cuts since the financial crisis.

The Spanish lender, which is not an investment banking heavyweight, has hired more than 100 mostly US-based bankers this year, with about half coming from Credit Suisse, which was rescued by its rival UBS in March.

Many of the recruits from Credit Suisse were recommended by Héctor Grisi, who became Santander’s chief executive at the start of the year and had previously spent 18 years at the collapsed Swiss bank.

“The chance to accelerate growth in the US was a logical opportunity for us,” Santander’s executive chair Ana Botín told the Financial Times. “What we want is people who fit our culture.”

Santander has been steadily growing its corporate and investment bank over the past seven years. The business has 8,000 staff, up from 3,500 in 2016 — though much of the increase came from a series of internal reorganisations.

This year’s hiring spree stems from Botín’s long-term strategy of trying to leverage Santander’s network of corporate clients in Europe and the Americas by offering them a range of services, including access to capital markets and strategic advice. Since 2017, the strategy has been led by José Linares, head of the corporate and investment bank.

“The business we run is very different from other investment banks,” said Botín. “It’s mostly a corporate bank and we are now adding the fee business, focusing on areas where we are strong like renewables and infrastructure.”

She added: “We already provide financing, but if we want to deepen client relationships, we need to give them access to dollar markets, strategic advice, access to capital markets and structured transactions.”

Santander has hired several executives who were in the upper echelons of Credit Suisse’s investment bank, including David Hermer, who was global head of equity and debt capital markets at the Swiss lender and is now head of the Spanish bank’s CIB in the US.

Steve Geller, who was global head of M&A at Credit Suisse, now has the same role at Santander, while Tom Davidov, Santander’s global head of financial sponsors, previously had the same role for the Americas at Credit Suisse. Santander has also recruited Rob Santangelo, who was co-head of global energy and infrastructure at the Swiss lender, to be global head of energy and energy transition at the Spanish bank.

In contrast to Santander’s hiring push, job cuts at the largest US banks are on course to surpass 11,000 this year as Wall Street contends with the worst recruitment market since the financial crisis following a pandemic-era hiring binge and a lack of dealmaking.

The biggest US banks spent more than $1bn on severance costs during the first six months of 2023, with lenders such as Goldman Sachs at present working on their annual round of job cuts for the end of the year.