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Card Issuer Profile: Grupo Santander

Datamonitor
February 26, 2009
129 Pages - SKU: DFMN2150923

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Introduction

Grupo Santander is one of the leading global card issuers, with significant portfolios across Latin America and Western Europe. In addition to details about the performance of its portfolio, this profile examines how the innovative structure of its cards operations and geographical positioning leave it well placed to succeed in the downturn.

Reasons to Purchase

Gain a detailed understanding of Grupo Santander's strategy and approach in the card market, and apply the lessons from this to your business
Learn how the structure of Santander Cards and the group's presence in Latin America positions it well to continue growing in the global downturn
Compare Grupo Santander against other leading global issuers using Datamonitor's unique Competitor Benchmark

Overview: Catalyst; Summary; Table of Contents; Table of Figures; Table of Tables; Grupo Santander; Key findings; Grupo Santander company overview; Company history and background; Ownership, staffing and management; Grupo Santander is led by Emilio Botin and Alfredo Saenz; The group had 133,000 employees globally at the end of Q3 2008; Management values; Company structure and the position of the cards business; Santander is structured along geographic lines; Several core businesses are directed at the global level; Group key financials; Profit and loss account; Customer lending balances; Balance sheet; Grupo Santander's cards business; Geographic coverage of Santander's cards business; The majority of Santander's card issuing occurs through its retail banking activities, but Santander Consumer Finance also plays an important role in expanding the group's international reach; In more general terms, Santander has a long history in the banking markets across Latin America and Europe; M&A and the impact on geographic expansion on the group and cards business; Between 2004 and 2008, Santander made three acquisitions that made it a major player in UK retail banking; The 2007 ABN Amro deal has played an important role in Santander's development; In 2008, Santander exchanged Interbanca for several of GE Money's European assets; Santander also acquired consumer finance assets from RBS in 2008; The 2008 acquisition of the remaining stake in Sovereign provides a strong platform for growth in the US; Card issuing strategy; Santander's strategy is driven at a national level under the guidance of the global cards unit, Santander Cards; Santander Consumer Finance has traditionally existed outside of this structure, but integration began in late 2008; In terms of distribution, Santander's primary channel is its branch network; Statistics on Santander's card portfolio; Grupo Santander had over 60 million cards in issue at the end of 2007; Card product offering; Spain: the Santander retail bank cards offer largely focuses on added value through insurance benefits; Spain: the Banesto product range is benefit heavy but explicitly targeted at particular customer groups; UK: the Abbey Zero Card is a very straightforward offer; Outlook for the cards business; Santander's focus on 'old fashioned' banking positions it well to cope with current challenges; The focus on retail banking and growing a strong branch network are now key assets; The structure of Santander Cards is a strength, but it remains small compared to other global issuers; A strong operation in Latin America will be central to its overall performance; The integration of Banco Real is therefore an important step in growing its activity in the region; However, generating growth in Europe will be far more challenging due to recession and saturation; Growing in this environment will require higher margins and taking share from competitors; It is unclear at this stage whether Santander will move further into issuing in the US
Datamonitor Competitor Benchmark
Appendix: Definitions; AAGR; CAGR; Charge card; Credit card; Debit card; Supplementary data; Methodology; Primary research; Secondary research; Further reading; Ask the analyst
Datamonitor consulting: Disclaimer
List of Tables: Table 1: Grupo Santander's board of directors, 2008; Table 2: Grupo Santander employees by region, 2004-Q3 2008; Table 3: Grupo Santander non-performing loans by division, 2005-Q3 2008; Table 4: Global coverage of Grupo Santander's card issuing operations, 2009; Table 5: Key Grupo Santander mergers and acquisitions, 1999-2008; Table 6: Metrics on Santander's UK businesses, December 2008; Table 7: Grupo Santander cards in issue by country, 2005-07; Table 8: Details of the Santander retail bank card offering in Spain, 2009; Table 9: Details of the Banesto card offering in Spain, 2009; Table 10: Pricing on the Abbey Zero Credit Card, 2009; Table 11: Scorecard logic, part one; Table 12: Scorecard logic, part two; Table 13: Grupo Santander employees, 2005-Q3 2008; Table 14: Grupo Santander branch numbers, 2004-Q3 2008; Table 15: Santander Cards balances outstanding, 2005-07; Table 16: Grupo Santander total net revenue, non-interest expenses, and operating margin, 2003-07; Table 17: Grupo Santander revenues by division, 2004-08; Table 18: Retail Banking gross operating income by region and country, 2007; Table 19: Grupo Santander liabilities and equity, 2003-07; Table 20: Net card fees and commissions and total commissions for services across the group, 2005-Q3 2008; Table 21: Grupo Santander customer lending balances by geography, 2005-07; Table 22: Current relevant publications; Table 23: Future relevant publications
List of Figures: Figure 1: Brazil and Mexico are the Grupo Santander Latin America divisions with the largest workforce, 2007; Figure 2: Grupo Santander is primarily segmented along geographic lines with core businesses direct at a global level; Figure 3: Grupo Santander has enjoyed strong growth in revenue and operating margins over the period 2003-07; Figure 4: Santander's Retail Banking division generated over 86% of the group's annual gross revenue in 2007; Figure 5: Led by the businesses in Spain, Continental Europe accounts for the majority of Santander's overall retail banking revenues, 2007; Figure 6: Santander's card business has accounted for a growing share of total fees and commissions for services, 2004-Q3 2008; Figure 7: Continental Europe accounts for the majority of customer loan balances, 2007; Figure 8: Germany, Spain, and Italy account for 76% of Santander Consumer Finance's loan balances, 2007; Figure 9: Grupo Santander has experienced a spike in the proportion of loans that are non-performing, 2004-Q3 2008; Figure 10: Grupo Santander's balance sheet has grown rapidly from 2003-07; Figure 11: Grupo Santander issues credit cards in 19 markets, across its retail banking brands and through Santander Consumer Finance, 2009; Figure 12: The acquisition of Banco Real has significantly expanded Santander's presence and network in Brazil; Figure 13: Sovereign has a large network spread across eight northeastern states; Figure 14: Sovereign Bank holds 3% of the market across the eight states in which it operates, Q2 2008; Figure 15: Grupo Santander co-ordinates its activities in cards at a global level, working with national or regional retail banking activities and the Santander Consumer Finance division; Figure 16: The majority of Grupo Santander's card portfolio is debit, 2007; Figure 17: Santander Cards has enjoyed strong growth in credit card balances outstanding, 2005-07; Figure 18: The Turyocio multi-retailer loyalty program allows Santander to earn reward points for card use; Figure 19: Santander cardholders benefit from exclusive rates at a leading online retailer; Figure 20: The Banesto Tarjeta Diez en Una product offers a permanent 5% discount at 10 major retailers; Figure 21: Abbey offers rebates on supermarket shopping and fuel purchases, 2009; Figure 22: Santander has one of the largest branch networks in the industry, 2008; Figure 23: The European pay later card space is becoming saturated, 2007; Figure 24: Datamonitor Competitor Benchmark - Grupo Santander

Card Issuer Profile: Grupo Santander

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