• Tuesday, March 05, 2024
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Santander moves to hire some of Credit Suisse’s top dealmakers

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Spanish bank seeks to poach senior investment bankers after Swiss lender’s rescue by UBS

Santander is in talks to hire several of Credit Suisse’s most senior investment bankers in New York, according to people familiar with the matter, as the Spanish bank seeks to capitalise on the Swiss lender’s emergency rescue by UBS.

Santander has held discussions with bankers including David Hermer, Credit Suisse’s global head of equity and debt capital markets, who has been with the bank since 1994, and Malcolm Price, head of coverage and advisory and global head of financial sponsors coverage, the people said.

The goal for Santander is to hire several senior Credit Suisse dealmakers and then more junior employees on their teams could follow, the people added. They cautioned that the talks between the bankers and Santander could still break down.

Credit Suisse and Santander declined to comment. Hermer and Price declined to comment through a Credit Suisse spokesperson.

Santander, while primarily a retail and commercial lender in Europe and South America, has ambitions to become a significant player in investment banking in the EU and the US. It is a strategic priority for chief executive Héctor Grisi, who himself joined Santander in 2015 from Credit Suisse and was promoted to the top role by chair Ana Botín last June.

Grisi has set divisional head José María Linares an annual growth target of about 15 per cent from 2022 to 2025 for Santander’s corporate and investment banking division in North America. While an ambitious goal, the Spanish bank remains dwarfed in scale by Wall Street rivals and is best known in the US for its subprime car financing business.

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Even though revenue has grown at an average rate of 13 per cent since 2017, the investment bank still only contributes a modest amount to the global group. In 2022, the unit generated 14 per cent of Santander’s €52bn of total income, compared with 81 per cent for retail banking.

The rationale for hiring bankers such as Hermer and Price, two well-known Wall Street veterans, is to enhance Santander’s ability to compete against other large banks to work on significant initial public offerings and leveraged buyouts.

Linares told the Financial Times in 2021 that he wanted to get into more lucrative areas such as M&A advisory, particularly working with private equity groups, to complement its leading positions in project finance and investment grade debt.

Credit Suisse was the seventh-highest fee-earning investment bank worldwide last year while Santander did not make the top 10, according to Refinitiv data. The Spanish bank made only $800mn in dollar-based capital markets and advisory fees last year.

The talks also underscore the rush by rivals to try to poach top talent from Credit Suisse in the wake of its rescue by UBS, which was orchestrated by the Swiss government. How to integrate Credit Suisse’s investment bank into UBS’s more risk-averse culture is viewed as one of the bigger challenges for the merger.

UBS has said it intends to swiftly wind down or sell parts of Credit Suisse’s investment bank and the Swiss government has committed funds to protect it against some of the losses it will incur.

Credit Suisse confirmed on Monday that it had terminated a deal with former board member Michael Klein to spin out the dealmaking unit under the First Boston brand. This leaves many of the staff that would have transferred over with an uncertain future as part of the merged group.

Credit Suisse had already been losing several senior dealmakers in recent years as numerous scandals, including more than $5bn in losses from the collapse of family office Archegos Capital and its dealings with specialist finance group Greensill Capital, damaged its franchise and pummeled its stock price.

Copyright The Financial Times Limited 2023