Banco Santander Central Hispano Group

Banco Santander Central Hispano (BSCH) is a Spanish banking group offering retail and wholesale banking, asset management and insurance service in Europe and Latin America. It is headquartered at the Ciudad Financeria Santander (Santander Financial City) in Madrid and employs around 130,000 people worldwide.

The history of BSCH began in 1857 when Banco Santander was established by royal decree to support trade links between the northern Spanish port of Santander and Latin America. During its early years, Banco Santander grew steadily, building up a network of regional branches around the city of Santander. In the early 1930s, Emilio Botín Sanz de Sautuola y López was appointed managing director and embarked on an expansion program throughout Spain. During the 1940s and 1950s, the bank opened its first international offices in Cuba, Argentina, Mexico, and Venezuela. By the 1960s, Banco Santander had become the seventh-largest Spanish bank. Expansion continued through to the 1980s, with Santander acquiring new businesses in Chile, Puerto Rico, and Uruguay. The CC-Bank was acquired in Germany in 1987, and an alliance was formed with the Royal Bank of Scotland. During the 1990s, Banco Santander developed its business in Brazil, Colombia, and Peru.

In 1999, Banco Santander merged with Central Hispano, a major Spanish banking group created following the fusion in 1991 of Banco Hispanoamericano (created in 1900) and Banco Central (created in 1919), to create Banco Santander Central Hispano. On Santander's 150th anniversary in 2007, BSCH was the largest banking group in the Eurozone and the eighth largest bank in the world in terms of market capitalization. In 2007, it generated revenues of €27.095 million, an increase of 20 percent compared to 2006. The same year, the group's operating profit was €9.060 million, an increase of 19 percent over 2006. With nearly 11,000 branches, the bank also operated the largest retail network in the Western world.

BSCH's recent growth has been achieved through a combination of factors, including a continued program of international expansion. In 2000, it acquired Banespa in Brazil, Grupo Serfín in Mexico, and Banco Santiago in Chile. A further landmark was reached in 2004 when it bought Abbey, Britain's sixth largest retail bank. A year later, BSCH acquired a 19.8 percent stake in Sovereign Bancorp, the 18th largest bank in the United States. Together with the Royal Bank of Scotland and Fortis, BSCH launched a successful takeover of ABN AMRO in 2007. As a result, BSCH obtained Banca Antonveneta, acquiring a long-desired presence in Italy, and Brazil's Banco Real, giving it a leading position in the fast-growing Brazilian market.

Recent growth can also be attributed to its exploration of business opportunities beyond its core retail banking operations. In 2002, for example, the bank created Santander Consumer Finance, a pan-European franchise for financing new and used car sales. Following a strategy of acquisitions, this division [Page 107]now operates in 19 countries around the world and generates nearly 10 percent of BSCH's total profits. Santander Consumer Finance now acts as platform to offer other forms of consumer finance, including credit cards and personal loans.

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