Our European correspondent, Chris Skinner, posted a piece from the UK last week on the success Banco Santander (STD) is having in Europe, even as so many of its competitors struggle.
I can’t speak to the details of how Santander is doing on the continent—but I beg to differ with Chris on Santander’s performance lately in the U.S. It has been awful.
Santander’s presence here consists of its ownership of Philadelphia’s Sovereign Bancorp. Sovereign is essentially a grab-bag of acquisitions that were rolled up over the years. The result, as you might expect, is a company with no pervasive culture, no distinctive value proposition, and a branch network that’s positively incoherent. Brand value? Forget it.
Top management has been in revolving-door mode for the past three years; Sovereign has had four CEOs since October of 2006.
On the asset side, meanwhile, the company has little lending capacity and is loaded down with toxic assets.
Sovereign is disaster. Santander is in the process of acquiring the entire company (it owns 25% now), and may be able to improve things once it gets full control. But Santander has had scant success since first becoming involved with Sovereign in 2006.
I wish Santander well with its investment, but don’t hold out much hope. This mess is too much of a jumble to be easily fixed.
In the UK, meanwhile, Santander’s much-heralded acquisition of Abbey has also been less than successful. Almost every customer satisfaction survey in the UK ranks Abbey National near the bottom of heap. Some surveys report 60% customer dissatisfaction. Not too inspiring.
Maybe Chris is right about Santander’s competitive strength. But in the U.S. and UK, they aren’t very apparent.