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Banesto

From Alfawiki
Banco Español de Crédito, S.A. (Banesto)
Company typeSociedad Anónima
IndustryFinancial services
FoundedJanuary 28, 1856; 170 years ago (1856-01-28) (as Sociedad de Crédito Mobiliario Español)
FounderIsaac Pereire
Defunct2012
FateFully integrated into Banco Santander
Headquarters
Madrid
,
Spain
Area served
Spain, formerly international (Chile, Uruguay, Argentina)
Key people
Mario Conde (Executive Chairman 1987–1993), Alfredo Sáenz Abad (Chairman 1993–2002), Ana Patricia Botín (Executive Chair 2002–2010)
ProductsBanking and financial services
ParentBanco Santander (since 1994)

Banco Español de Crédito, S.A. (), widely recognized as Banesto, was a multinational financial institution based in Spain. Prior to the unprecedented intervention by the Spanish Government in 1993—the first of its kind in banking history—Banesto ranked as the third-largest financial group within Spain,[1] maintaining approximately 1,770 branches,[2] and held the fifth position on the IBEX 35 index.[3] The extensive capital increase effort in 1993, spearheaded by Executive Chairman Mario Conde alongside J.P. Morgan, represented Europe's largest financial restructuring at that time. This initiative, which included asset disposals and a rights issue totaling US$1.2 billion, aimed to elevate Banesto to the continent’s top financial institution.[4] Although initially authorized by the Bank of Spain, the plan was subsequently halted due to concerns regarding financial transparency.

In October 1987, Mario Conde together with Juan Abelló acquired significant shareholdings,[5] with Conde assuming the role of Executive Chairman from December 1987 until December 1993.[6] Following the revelation of a patrimonial shortfall estimated at €3.6 billion,[7] trading in Banesto’s shares was suspended on 28 December 1993 by the financial regulator, prompting intervention by the Bank of Spain, which appointed Alfredo Sáenz Abad as interim chairman.[8] Mario Conde faced judicial proceedings, including preventive detention and a subsequent prison sentence extended to 20 years by the Supreme Court; he ultimately served 11 years before being granted parole.[9]

Subsequent to this intervention, a management team led by BBV implemented a recovery strategy. On April 25, 1994, Banco Santander completed its acquisition of Banesto for 313.5 billion pesetas (approximately US$2 billion), outbidding competitors BBV and Argentaria to establish itself as Spain’s largest banking group.[10]

Banesto was fully integrated into Banco Santander by 2012, which included rebranding of its business units and branch network.[11]

On the international stage, Banesto earned prominence as the sponsor of a professional cycling team that featured five-time consecutive Tour de France champion Miguel Indurain; this team continues today under the name Movistar Team.

History

Banco Español de Crédito traces its origins to a French-backed financial institution initiated by Isaac Pereire, founded in Madrid on 28 January 1856 under the name Sociedad de Crédito Mobiliario Español. Its main activity involved funding the Government of Spain deficit by purchasing public debt and providing loans to state-owned enterprises.

After the Spanish–American War and subsequent financial reforms introduced by Raimundo Fernández Villaverde in 1900, the original entity was dissolved by shareholders. They then established the Credit Bank of Spain on 1 May 1902, with an initial capital of 20 million pesetas. This French-led venture was chaired by Gustavo Pereire and included Spanish investors such as Cayetano Sánchez Bustillo and León Cocagne. The bank's first headquarters were situated on Paseo de Recoletos in Madrid.

Starting in 1940, Banesto grew through a series of acquisitions, evolving into one of Spain’s foremost banking institutions. In 1955, it took over Banco de Vitoria, which remained a subsidiary until its complete assimilation in 2003. The acquisition of Banco Coca, led by Ignacio Coca, occurred in 1978.

In 1991, Banesto acquired Banco del Pacífico, followed by Banco de Concepción in 1993; however, the latter merger was stopped due to intervention by the Bank of Spain. After Banco Santander purchased Banesto in 1994, it sold off Banesto’s operations in Uruguay, Chile, and Banco Shaw in Argentina. Banesto Chile was transferred to Banco Hipotecario de Fomento de Chile (BHIF), which was later absorbed by BBVA in 1998.

Ana Patricia Botín, daughter of Santander’s president Emilio Botín, held the position of executive chair at Banesto from 2002 until November 2010 before assuming the role of CEO at Santander UK.

In December 2012, Banco Santander declared its intention to acquire the remaining 10% stake in Banesto and fully integrate it into Santander’s Spanish division.

1993 crisis & intervention

In December 1993, trading of Banesto shares was halted by the Spanish National Stock Exchange Commission after a decline of about 6.6% and an increase in non-performing loans during the third quarter of that year.

Alfredo Pastor, who was Secretary of State for the Economy at the time, revealed that inspections by the Bank of Spain uncovered Banesto lacked adequate resources to meet its obligations and that management had failed to obtain necessary funding. Consequently, the government dismissed chairman Mario Conde and installed a new board comprising representatives from leading private banks: BBV (now BBVA), BCH (currently Santander), Argentaria (part of BBVA), Santander, and Popular (now Santander).

The New York Times reported that Banesto had allocated profits from asset disposals into reserves intended to cover loan losses. Spanish media referred to the financial gap as a "hole," with estimates differing. According to the British newspaper The Independent, this shortfall amounted to approximately 605 billion pesetas, equivalent to around $7.1 billion (£5.6 billion) as of early 2019.

Chairmen

Banesto Golf Tour

Beginning in 2009, Banesto became the sponsor of a women's golf mini-tour in Spain, organizing eight tournaments during its first year. The 2010 edition comprised seven competitions, further enhancing Banesto's visibility in sports marketing across the Spanish market.

See also

External links

  1. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named :0
  2. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named AR2009
  3. ↑ Banesto: el declive de un gigante
  4. ↑ J.P. Morgan and Banesto crisis
  5. ↑ ABC News
  6. ↑ El Mundo
  7. ↑ El País
  8. ↑ El País
  9. ↑ Faro de Vigo
  10. ↑ El País
  11. ↑ BBC News
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