Banking

Banco Santander banks on China's growing ties

By Wang Bo (China Daily)
Updated: 2010-11-03 14:25

Spanish lender expresses strong commitment to Chinese market

BEIJING - Spanish banking giant Banco Santander is planning to expand its presence in China to ride on the country's growing business ties with Latin America, a top manager of the bank said on Tuesday.

"We are here in China because we must follow our clients. And without the Chinese market, we cannot be one of the top 10 banks in the world," Juan R. Inciarte, senior executive vice-president for strategy of the bank, said in an interview.

Santander is now the largest financial group in Spain and Latin America. It also has a broad presence in European countries, especially after the bank made several major acquisitions after the outbreak of the financial crisis.

Inciarte expressed the lender's strong commitment to the Chinese market and said the fast-growing trade and investment ties between China and Latin America will bring business opportunities to Santander.

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The bank will also build its franchise in China through a partnership with China Construction Bank (CCB), initially through a joint venture in the rural banking business, Inciarte said.

Santander and CCB, China's second-largest lender by assets, are planning to open 100 banks in Chinese villages in the next three years with an initial investment of 3 billion yuan ($449 million). The project is still awaiting approval from regulators.

Through the partnership, the bank can bring its technical experience of conducting rural finance in Spain and Brazil to China, Inciarte said. "There are many similarities between the markets where we have retail banking experience and China so that we can provide expertise in rural financing," said Juan San Roman, head of the bank's Asia unit.

The Spanish lender's subsidiary, Banesto Bank, has a strong presence in rural financial services, with about 1,900 European branches of which nearly one-third are in rural areas. Santander is also discussing retail banking business cooperation with CCB in China and details about the move are expected to be released next year.

The two lenders also have a trade finance agreement, in which CCB's customers who have export and import businesses in Latin America and western Europe are able to receive financial support from Santander.