Santander Corporate & Investment Banking not only maintained its prominent position in the Iberian credit market last year, but also increased its market share by stepping up to support customers in an unprecedented year.
In fact, Santander CIB made good use of its strong balance sheet and capital position, leading to obtaining around 94 syndicated loans for a number of Iberian borrowers, increasing the bank’s market share to 20.7% – almost double that of its closest competitor – 17.9% a year earlier.
Antonio García Méndez, head of Iberian global debt financing, says that several factors contributed to the bank’s good performance. “We have a unique business model that combines excellent investment banking capabilities, a complete multi-product offering and the opportunity to provide access to your own large balance sheet and strong capital position, taking advantage of our position in the region, covering not only large corporate segment, but also the SME segment ”, he says. “During 2020, despite the complex circumstances, Santander continued to support customers, lending more than 1 billion euros a day to companies and supporting six million customers with default and other measures.”
Certainly, the Covid-19 crisis has had a profound impact on Spain and its corporate sector. The companies responded by withdrawing their credit lines – Santander saw a 30% increase in the use of revolving and support credit lines – and, when it became clear that the situation would persist, many requested creditors’ vacation requests.
“Santander CIB is recognized as a customer-oriented institution and, as such, we have acted very constructively during the crisis, being close to and helping our customers,” says Pablo Trueba, responsible for Iberian DCM and syndicated loans.
Conditions, however, were particularly challenging in all markets. In mergers and acquisitions, for example, activity stagnated and only started to return in the fourth quarter. Even companies classified as investment grade have postponed their usual loan refinancing.
“Some foreign institutions have retreated to their domestic markets and liquidity has become more expensive and with shorter terms,” says Trueba. “Companies in highly impacted sectors, such as aviation, leisure and retail, needed emergency liquidity lines and, in early April, we had the opportunity to help close the first of these businesses.”
Santander was clearly present to its customers when they most needed liquidity last year. In addition, the bank was also at the forefront in supporting environmental, social and governance (ESG) credit formats in the Iberian Peninsula and throughout Europe. ESG-linked funds are becoming increasingly common in new revolving credit lines when borrowers refinance – usually with margin adjustments based on key performance indicators (KPIs).
While the general Spanish loan market suffered in 2020, the volume of business signed in ESG formats increased and – perhaps not surprisingly, given Santander’s focus on sustainability in all of its businesses – the bank reached a market share of more than 21 %, having worked in 22 of the 30 such businesses in the market.
“We sincerely believe that ESG is not just a fashion, but a long-term trend and, as such, has been incorporated as one of our central strategic pillars”, says García Méndez. “Santander CIB has a global ESG team, fully dedicated and specialized, which allows us to be very proactive, encouraging our customers to explore this route to expand financing opportunities.”
As most financial markets are progressively recovering from the strong economic impact of last year’s pandemic, syndicated lending market conditions are almost back to pre-crisis levels. Certainly, for borrowers in sectors less affected by the economic crisis, there is abundant liquidity available in the global debt markets, which contributes to Santander’s strengths.
“We are taking advantage of the strength of our franchise and the long-standing relationships we have with companies – improved over the past year – to continue supporting customers,” says Trueba. “The ability to serve customers from a multi-product perspective, together with our strong underwriting capacity, distribution capacity and investor reach, allows Santander to be at the forefront of credit markets across Europe.”