Chief executive officer, Banco Santander Central Hispano
Born: November 1942, in Las Arenas, Spain.
Education: University of Valladolid, JD; Deusto University, MS.
Family: Married; children: three.
Career: Tubacex, 1965–1980, board member; Banco Vizcaya, 1980–1983, director of planning; Banca Catalana, 1983–1988, managing director; Banco Vizcaya, 1988–1990, managing director; Banco Bilbao Vizcaya, 1990–1993, first vice president; Banco Español de Crédito (Banesto), 1993–2002, president; Banco Santander Central Hispano, 2002–, CEO.
Address: Plaza de Canalejas 1, 28014 Madrid, Spain; http://www.gruposantander.com.
■ Alfredo Sáenz established himself as an expert at saving failing banks in Spain. With degrees in both law and economics, he worked for many years in the industrial sector in his native Basque country. In the 1980s he entered banking and quickly became one of the country's most influential bankers. He made his reputation by rescuing the declining Banca Catalana. He cemented this reputation by restoring Banesto in the 1990s. Known for his single-minded dedication to whatever task was at hand, Sáenz went to work in the early 2000s to help Banco Santander Central Hispano in its attempt to solve its economic difficulties in Latin America.
Born in 1942 in Spain's Basque country, Sáenz obtained a law degree from the University of Valladolid. He also received a degree in economics from the prestigious Jesuit Deusto University in Bilbao, where he later taught management on occasion. Sáenz turned down such positions as deputy defense minister in the Spanish government to work in the industrial sector in the Basque country. From 1965 to 1980, he worked for Tubacex, a Basque steel pipe producer. After leaving Tubacex, Sáenz went into banking. In 1980 Pedro Toledo, who ran Banco Vizcaya, hired Sáenz as director of planning. Toledo, who had close ties to Spain's Socialist government, hired numerous bright and ambitious young Spanish executives, many of whom went on to become some of the country's most influential bankers.
The 1980s were a time of crisis in the Spanish banking sector, and many banks were failing. Among those experiencing financial difficulties was the Banca Catalana. Spain's Central Bank fired Catalana's management, and Banco Vizcaya took it over. Toledo sent Sáenz to rescue the failing Catalan bank. He soon made Catalana into one of Spain's most profitable banks. Sáenz became well liked in Barcelona, an unusual compliment for a Basque. He even went so far as to make his first speech to Catalana shareholders in the Catalan language, which he had learned in just nine months.
Toledo's Banco Vizcaya later merged with Banco Bilbao, and soon a cultural clash between the employees of the two banks emerged. Some saw Vizcaya's managers as too flashy and incapable of running a large bank. Bilbao's executives had the reputation of being pen pushers who spent too much time counting paper clips. In 1988 Vizacaya's Toledo and Bilbao's José Angel Sánchez Asain became copresidents of the new Banco Bilbao Vizcaya (BBV). Then, in 1989, Toledo died. The following year the Central Bank announced that it would pick a single president for BBV. There was some talk that it would select Sáenz to run the bank. However, the Central Bank picked Bilbao's Emilio Ybarra instead, relegating Sáenz to the position of first vice president. Sáenz accepted the lesser position with grace.
In December 1993 Sáenz was provisionally named as president of the Banco Español de Crédito (Banesto). Spain's Central Bank selected Sáenz to replace Mario Conde and to rescue the failing bank. The backing of the Central Bank virtually assured that shareholders would elect Sáenz as president. Many analysts in Spanish banking circles felt that the Central Bank rewarded Sáenz with the Banesto post for graciously accepting the post of vice president at BBV rather than fighting the decision.
BBV, Sáenz's employer, agreed to "lend" the executive to Banesto. Soon both BBV and Banco Santander were competing to take over Banesto. Many analysts thought that since BBV had allowed Sáenz to go to Banesto, it had the inside track to absorb the failing bank. However, in April, Banco Santander won out and took control of Banesto. In an ironic twist, Banco Santander kept Sáenz as president of Banesto with a generous compensation package rather than letting him return to BBV. Banco Santander wanted to keep Sáenz because of his established reputation as a troubleshooter who was capable of restoring the health of failing banks. Once firmly in position at Banesto, Sáenz brought a number of high-ranking executives from BBV, all of them former employees of Banco Vizcaya before the merger with Bilbao.
Sáenz informed the Financial Times that he had to start from scratch in his rescue efforts at Banesto, saying that "when I got here I didn't know where the bathrooms were, let alone the documents, and the first weeks were horrible. In a question of weeks, I had to discover what the possibilities were and where the bank should go if it did recover" (October 4, 1994).
Sáenz established five priorities in his attempt to get Banesto back on its feet. Known for his single-mindedness, he explained to Euromoney (June 1995) that "nobody [was] allowed to talk to me about anything else." He didn't even want to hear about a possible sixth priority. Sáenz was very strict in adhering to his five priorities. When all Banesto employees turned on their computers in the morning, after a screen came up saying "Buenos dias," five windows with the five priorities appeared on their monitors. Each window told the employees how they and their departments were doing in meeting each one of the goals as of that day. Sáenz claimed that such a tactic helped focus his workers on the task at hand.
Principal among the priorities was recovering bad debts, of which the bank had many. Sáenz appointed 800 employees to the task of recovering unpaid loans. He also wanted to improve the bank's risk-management systems, which he felt were inadequate, as was clear from the many bad debts on Banesto's books. Rather than blame any particular people for the problem, Sáenz claimed that there was a general lack of risk management know-how at the bank. Another step that Sáenz took was to reconstruct the bank's loan book, establishing credit ratings for all customers in the hope of avoiding future bad loans. Sáenz also sought to raise the fees that Banesto charged its customers for various services. While not popular with clients, the bank's fees had been much lower than those of other Spanish banks. In addition, Sáenz began to dispose of some of Banesto's assets not related to banking, such as a battery producer, a mining company, and a winery.
In 1995 Sáenz could claim some successes, although his job was not done. He informed Euromoney that "by the year's end, we will have achieved about 70 percent of our recovery program's aims, but 1996 will still be a housekeeping year" (June 1995). By 1997 Sáenz had restored Banesto to financial health. The bank was turning a profit, and he had succeeded in cutting the amount of bad loans in half. Ana Patricia Botín, who replaced Sáenz as Banesto CEO, told the Wall Street Journal , that "things have improved so much at Banesto under Alfredo, that finding room for further improvement isn't easy" (March 27, 2002).
In March 2002 there was a management shake-up at Banco Santander Central Hispano (SCH), Banesto's parent company. Sáenz left the Banesto post to accept the position of CEO at SCH. His main concern upon taking over at SCH was the bank's exposure to Latin America, especially Argentina. An economic crisis in that country had led to a depreciating currency and many restrictions on banking operations. In response, Sáenz stopped providing capital to SCH's Argentine units until the government there could guarantee a viable financial system. Sáenz also vowed to lower his bank's profile in Latin America, because he felt poor economic situations in the region were hurting SCH's share price. To this end, and despite the fact that SCH owned banks in 11 Latin American countries, Sáenz decided to concentrate only on Brazil, Mexico, Chile, and Puerto Rico. Furthermore, he determined to refocus SCH on its European activities.
Sáenz established a reputation as a workaholic technocrat. He was also known for his ability to focus on the matter at hand, rarely straying from his current task. He was well like among his peers. While he had a conservative image, Sáenz was known to have a great sense of fun underneath his staid veneer. An avid reader, he typically selected books from his large personal business library. He also frequently delivered speeches on the art of management. Sáenz was known as a family man who spent many summers with his wife and children in Majorca.
See also entries on Banco Bilbao Vizcaya, S.A. and Banco Santander Central Hispano S.A. in International Directory of Company Histories .
Bruce, Peter, "The Rise of Alfredo Sáenz," Financial Times , January 4, 1994.
Burns, Tom, "Banesto Bounces Back to Health with 26 Percent Advance," Financial Times , January 22, 1998.
——, "Sáenz Poaches from BBV," Financial Times , May 16, 1994.
——, "Unraveling the Banesto Tangle," Financial Times , October 4, 1994.
Crawford, Leslie, "SCH Hit by Exposure in Argentina," Financial Times , April 30, 2002.
Eade, Philip, "They Reign in Spain," Euromoney (September 1994): 38–42.
Levitt, Joshua, "From Industry to Top Banker," Financial Times October 21, 2003.
"Makes Sáenz," Financial Times , April 28, 1994.
Narbrough, Colin, "Banesto Chief Says Revival Is Coming," Times (London), August 23, 1994.
Vitzthum, Carlta, "Santander Head's Daughter Returns to the Spotlight at Banesto Retail Unit," Wall Street Journal , March 27, 2002.
"Wake-up Call at Banesto," Euromoney (June 1995): 152.