Santander bid to grow and re-enforce its position as a top provider of local products in Latin America is working so far, the bank's head of sales of equity derivatives in the Americas, Oriol Rius, said in an interview with SRP, one year after his appointment to spearhead the Spanish bank's efforts in the region.
"Santander has the leading financial services franchise in Latin America, with a strong multi-local presence that allows us to be among the top providers of local product," he said. "Bridging that local presence with our global capabilities in equity derivatives constitutes most of my job. Santander's commitment to the region provides a clear competitive advantage for any activity we want to pursue there."
Rius told SRP that the bank's experience in the European markets has shown that understanding client's needs is paramount to becoming a 'business partner' in any market.
"Our main goal is to leverage on the strong local presence we have in the countries [we operate] in order to offer them the right solutions from the wide range of products in our global platform," he said. "Along with that, and having the successful experience that is already showing in Mexico after only a few years of focus in equity derivatives (we are clearly among the best of that market, if not the best), we want to help local market and industry regulators to develop their derivatives markets, increasing hedging and investment tools in line with best practices."
According to Rius, Santander has spotted good potential in many different areas and markets, although based on the bank's setup retail structured products activity and corporate business are the main targets.
"We believe that the gap of equity derivatives activity between Latin America and Europe or US will be closing as knowledge of products and liquidity of local markets improves, and that should trigger more opportunities for banks with local presence, wide experience providing solutions for their clients, and good balance-sheet and credit ratings for the clients to be absolutely comfortable with."
One of the issues facing development of the bank's position is the relatively poor liquidity for local stocks, meaning limited hedging strategies.
"However, as long as we are leading the increase of market liquidity in many countries and we keep committed to our relationship with our clients, we should keep increasing our business with corporate clients," said Rius. "Our lending business and our credit ratings should help us significantly for that goal."