Banco Santander plans Asia expansion

During the past year or so, Banco Santander has been one of the few banks with enough cash to take advantage of its rivals' troubles. It is bigger today, after the financial crisis, than ever before; and now the acquisitive Spanish bank has its sights set on Asia.

Santander set up a small Asia head office in Hong Kong in 2008 and now has around 120 staff in the region, based in offices in Australia, China, Japan and South Korea. At the moment, the bank's Asia team is mostly kept busy servicing cash and trade flows between Asia and Latin America, where the bank has a formidable network and client base. But its long-term ambitions are considerably grander than that.

"In the future, not to have a presence in Asia would not be wise," said Manuel Varela, Santander's Asia head. "We are not here to stay as we are; we are learning more about the way to do business here. Our intention is to grow."

Having made numerous acquisitions in Europe and Latin America, it is natural to expect that Santander will take the same approach in Asia, but Varela insists that while expansion is its long-term ambition, it plans to grow in a more cautious manner in this region.

"We have great experience doing business outside Spain and practically all new expansion was done by buying things, but in Asia we are doing it organically for now," he said. "Why? We're number one in Chile, but it took 25 years. In Brazil it took us 20 years to create a leadership position and that's in a big client country for Spain. Asia probably needs a long time too. I don't see a big acquisition in our foreseeable future."

Varela knows that Santander has a lot to learn before it is ready to make a big investment in Asia, but he is also aware that the region's growing trade with Europe and Latin America in particular gives it a chance to set up shop on the ground here to get to know more about the Asian end of those trade flows and to use its contacts to start winning regional business.