Spanish bank Santander plans to make the United States the launch pad for a revamped consumer platform that it will roll out globally, Ana Botín, chief executive of the eurozone's largest bank by market value, told Reuters.

Santander, which relies on 10 key markets for most of its business, wants to use its third-largest market by revenue, the United States, to build its own technology platform for consumer banking, including digital banking and consumer finance.

It will then adopt that platform across its retail and commercial operations globally, which account for nearly half of Santander's global profits.

The bank is in the midst of transitioning from older technology to modern cloud-based IT infrastructures, and the new platform is part of a broader strategy to extract savings and drive profits with better technology and lower funding costs.

"Our goal is to build a common platform for our retail and commercial business, using our own technology. This year it is being rolled out in the U.S., but we will slowly but steadily roll it out across our network," Botín said.

Santander did not disclose the costs of the platform migration, but said it has already saved €237 million since 2022, €50 million in the first quarter alone, thanks to the technology upgrades.

Santander's investment in the U.S. reflects its preference for the Americas, where it sees greater growth potential than in the more mature European markets. So while Botín expects further consolidation in European banking following arch-rival BBVA's hostile takeover bid for Spanish counterpart Sabadell, he says Santander does not plan to be part of it.

The bank will launch its digital Openbank - which already serves more than 2 million customers across Europe - in the U.S. and Mexico later this year.

"In the U.S. we will start with a high-yield savings product, as, by capturing deposits outside of our current footprint we can expand our customer base and replace more expensive wholesale funding for our auto business," said Botín, who took the helm of the bank in 2014 after the death of his father.

"Then, over time, we will offer other products and services," he added.

Santander, like other banks, has benefited from rising interest rates, but growth in its key Latin American markets has given it an edge over more European-dependent competitors that have reduced their presence in the Americas.

BBVA exited the U.S. market in 2020, putting the proceeds into share buybacks. HSBC and BNP Paribas also sold their U.S. retail-focused operations.

Thanks to a 23% rise in its shares this year, Santander recently overtook BNP Paribas to become the most valuable financial institution in the eurozone.

It has promised that the recent rollout of its five global units - retail, consumer, payments, wealth and corporate and investment banking - will make the bank globally simpler and more efficient.

The successful launch of a fully digital offering in the U.S. will be crucial, as Santander's U.S. business has generated lower-than-expected returns and caused some headaches in the past.

In 2020, its subprime auto lender agreed to modify its underwriting practices as part of a $550 million settlement for subprime loans it had made.

In the first quarter, Santander's U.S. business posted a return on tangible equity ratio of 7.98%, compared with 14.9% at the group level.

Recruitment costs and higher provisions led to a 6.8% year-over-year decline in first-quarter earnings in the United States.

Santander has hired about 200 employees for its U.S. corporate bank, and Botín said the new hires-many of them well-paid bankers from the collapsed Credit Suisse bank-were already bringing in more business.

"What the new team gives us is the ability to support those clients with other fee-based services. And it's already starting to pay off," said Botin, who added that the staff expansion was largely done.


BBVA's bid for Sabadell, Nationwide's bid for Virgin Money in the UK and some comments from supervisors and MPs have rekindled expectations of further consolidation in Europe's fragmented banking sector.

Botín said she expected more deals, although more domestic than cross-border.

"I think there will be more mergers and acquisitions. It will happen in Germany. Or in the UK. Or in Italy," Botín said.

"But I don't think there will be many cross-border deals, because it's much more difficult to justify the investment, not least because euros are protected domestically," she added.

At present, euro zone banks cannot take deposits in one country and lend them out in another.

European cross-border banking arrangements are rare. And the obstacles are different regulations and labor laws, the lack of a euro-area-wide deposit guarantee scheme and political resistance.

(Reporting by Jesús Aguado, Tommy Reggiori Wilkes and Elisa Martinuzzi; edited by Tomasz Janowski; edited in Spanish by Mireia Merino)