Having run a dotcom start-up, Santander UK chief Ana Botin knows just how tough life can be for entrepreneurs .
Ana Botin is just reaching the crux of a speech to small businessmen when the fire alarm goes off. For 30 seconds or so the most senior woman in British banking remains at the lectern but, as the audience rises to its feet, she bows to the inevitable and joins the queue for the exit.
Ten minutes later, and now back inside Oxford University’s Said Business School, the Santander UK chief executive appears unperturbed by the disruption, though owing to her schedule, which involves lunching with the university’s vice chancellor, giving a lecture to business students, and meeting with the students union, she will not get to finish her speech.
Among the ranks of Britain’s banking establishment, Ms Botin is perhaps unique for having run a small business herself during the white heat of the dotcom bubble at the turn of the century.
The experience was not an entirely happy one. Web consulting firm Prolink SA, later renamed Razona, rode the highs and lows of the period before being bought out in 2002. That left Ms Botin to end her self-imposed exile from banking and return to the family business, Santander, which is still chaired by her father, Emilio.
However, the lessons learned from the experience have informed her approach to banking ever since.
“The thing that really sticks, and when you talk to entrepreneurs they say the same, is just thinking about the next day, the next week. If you don’t get the contract you might not survive. It’s that sense that I might not be here in a few days or a few weeks if I cannot achieve this new sale or this new contract,” she says.
“My God, that was something else.”
“Oh, much tougher, yes. Anybody who has run a small company has gone through such a hard time . . . I mean, attracting people. I have always built businesses even back at Santander in the early 90s I was helping to build the Latin American bank, creating new groups of people, hiring people but it [running your own business] was a totally different story.”
As the head of one Britain’s largest high street banks, with 1,300 branches across the country, Ms Botin is determined to demonstrate that she has not forgotten those hard-learned lessons .
At Banesto the medium-sized Spanish lender controlled by Santander, into which she was parachuted by her father to run, when she returned to banking 10 years ago Ms Botin became well-known for travelling the country with a key message. She (SNP: ^SHEY - news) would preach to small businesses a mantra of technological modernisation and the need to embrace globalisation.
Today at Santander UK she is bringing the same message to British businesses as part of a concerted strategy to become the “UK’s SME bank of choice”.
“We are the most British of Britain’s banks” says Ms Botin, to laughter from the floor during her disrupted speech. “This always gets a chuckle, I don’t why,” she deadpans in reply.
In part, the strategic pivot towards SMEs is born of necessity.
Last month, Ms Botin and the Santander UK board made the controversial decision to scrap the planned purchase of 316 branches from Royal Bank of Scotland after a long period of delays.
Withdrawing from the deal left the bank with a bill of about £50m but also with more than £2bn of equity capital that had been allocated to fund the purchase burning a hole in its pocket.
Using this spare capital, Ms Botin says she will be “accelerating” the expansion of the bank’s small business lending, which has already grown by 20pc every year since 2009 to more than £10bn of gross outstanding loans.
“This is net new lending,” she says. “People who are banking with us are switching from other banks. Without us there would be less credit available today.”
Unsurprisingly, Santander has been an enthusiastic supporter of the government’s Funding for Lending scheme launched in July, and has already drawn down £1bn of the £9.4bn of cheap funds for which it is eligible.
On Thursday the bank announced it would be providing £500m of asset financing to help small businesses purchase new equipment.
These moves have endeared Ms Botin and Santander UK to the authorities and even the most senior officials privately repeat the line that the bank is the most British of the country’s banks.
However, despite wrapping itself in the Union Jack, the bank is still a long way from achieving its core aim of floating its UK business.
Before Ms Botin joined Santander UK late in 2010 in the wake of Antonio Horta-Osorio’s move to become chief executive of Lloyds Banking Group the flotation of the business had seemed imminent.
“Neither the markets nor the regulations would have allowed us to do an IPO,” says Ms Botin. “We need the other UK banks to rise in value before we can float. We are not going to float at the current depressed valuations.”
The incoming structural reforms recommended by the Vickers Commission are likely to impact Santander the least of the major banks but are likely to act as a continued brake on the price investors are willing to pay for British bank stocks, admits Ms Botin.
“We need the banks to be attractive to investors again. If you look at where investors could put their money at the moment, it is clear that banks are not that attractive,” she says.
However, she is quick to head off any speculation that Santander will cut and run from a business that has become the bank’s second largest after its Brazilian operations.
“We are here to stay,” she insists.
Ms Botin points out that Santander should by all rights be considered “one of the largest foreign investors in Britain”, having spent more than £16bn over the past decade building up its business in the UK.
On her watch alone, the bank has ploughed its way through about £500m on improvements to its IT systems and £1.7bn since making its first move into the British market with the takeover of Abbey National in 2004.
The spending is intended to reduce customer complaints that had seen Santander become a byword on consumer forums for poor customer services and the most complained about bank on the high street.
The big investment is having its intended effect and in its first-half results Santander made a big point of reminding investors it was the only bank to record a year-on-year fall in complaints.
As SMEs struggle to stay afloat in an ailing UK economy, Ms Botin might well be a businesswoman worth listening to.