Santander’s Executive Churn Indicates Move Toward Corporate Consolidation

santander-bankSantander Holdings USA (SHUSA) and Santander Consumer USA (SC) are “taking steps toward integrating their operations” under the Spanish parent Banco Santander, Christopher Donat, managing director of equity research at Sandler O’Neill, told Auto Finance News.

This week Santander Consumer made several executive changes that suggested this shift, including the addition of Juan Carlos Alvarez as the new chief financial officer working under the previously announced Chief Executive Scott Powell.

Alvarez formerly served as corporate treasurer for SHUSA — which currently serves as SC’s parent company — and Powell still holds dual CEO positions at both companies.

“[Powell] is building out his leadership team as part of his work to evolve the company to operate at bank holding company standards,” a Santander spokeswoman told AFN. “That evolution includes more underwriting discipline, taking advantage of our ability to underwrite loans across the credit spectrum, strengthening risk management, and creating a culture focused on compliance and consumer practices.”

Those goals are a continuation of the company’s former CEO, so the biggest change and advantage for the company would be an easing of the corporate regulatory structure, Donat said. Investors can also expect greater influence from the parent bank.

“I don’t expect any dramatic changes here — it’s incremental,” Donat said. “Yes, you have different personalities in the CEO, CFO, and operations roles. Does that immediately change how Santander performs its underwriting policies? No. Does it change dealer relationships? No. … It certainly looks like we’re seeing Banco Santander exert its influence rather than having this business run out of Texas on its own.”

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