Juan Carlos Hidalgo/European Pressphoto AgencyAlfredo Sáenz helped transform Banco Santander from a regional lender to an international giant.
LONDON – Alfredo Sáenz, chief executive of Banco Santander, resigned on Monday, less than a week after the Spanish bank reported that first-quarter net profit fell 26 percent.
Mr. Sáenz, 70, joined Santander in 1994 after the bank acquired a local rival, Banesto, and will be succeeded by Javier Marín Romano, currently head of the firm’s insurance, asset management and private banking operations.
Mr. Sáenz has helped Santander’s chairman, Emilio Botín, 78, transform the firm from a regional lender to an international giant with operations from the United States to Poland.
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Yet Mr. Sáenz has also faced a series of legal problems, including his conviction in 2009 for making false accusations in the early 1990s in a case involving Banesto. He was later pardoned by Spain’s departing Socialist government in 2011, though the country’s supreme court partly overturned that decision this year.
Santander has also been hurt by persistent problems in Europe, as well as by increasing headwinds in emerging markets like Brazil. Last year, Santander set aside provisions totaling $25 billion to cover a rise in delinquent mortgages in Spain’s struggling economy and an increase in other troubled loans across its businesses.
In Latin America, where Santander earns more than half of its net income, a slowdown in economic growth and an increase in troubled loans is starting to cause problems.
First-quarter earnings for the region, for example, fell 18 percent, to 988 million euros ($1.3 billion), despite an increase in local lending and customer deposits. The firm’s profit from Continental Europe in that period plunged 27 percent, to 307 million euros.
The decision by Mr. Sáenz to step down comes after several months of uncertainty. Spain’s supreme court ruled in February that the country’s previous government had gone too far in its pardon of Mr. Sáenz, which had raised concerns over his tenure.
As part of its decision, the court reinstated Mr. Sáenz’s criminal record, casting doubt over whether he could continue as a senior executive at Santander.
The current Spanish government passed a law this month that allows bankers with criminal convictions to continue working in the country’s financial industry. Analysts said the decision for Mr. Sáenz to step down was an attempt to ease the uncertainty surrounding the leadership of Santander, the country’s largest bank.
Shares in Santander rose 1.9 percent in morning trading in Madrid on Monday.
A spokesman for Santander declined to comment, while a representative for Mr. Sáenz was not immediately available to comment.
Article source: http://dealbook.nytimes.com/2013/04/29/santanders-chief-executive-resigns/?partner=rss&emc=rss
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