Santander names a Botin to head the bank for a fourth time

The relatively young 53-year old Botin will replace her deceased father, Emilio Botin, at the helm of the Eurozone’s second largest bank, with a market capitalisation of €92bn ($119bn) - approximately twice that of Barclays.

Rivals such as JP Morgan or HSBC currently have a market value of $224bn and $202bn, respectively.

With €1.2trn in assets and spanning three continents the question on every investor’s mind is whether she is up to the job, especially given the family links, although she is by no means the first in her family to take up responsibilities at that bank.

Indeed, the Botins’ history at Santander spans more than an entire century. In fact, she is the fourth generation of the family which has been appointed to run the lender. As well, until not too long ago she was seen as an ‘underdog’ to eventually replace the family patriarch.

Naturally, some experts cited by different media outlets – who declined to be named - are sceptical of any family succession, particularly at a publicly-listed firm. Indeed, most corporate governance codes are quite reticent to allow such a possibility.

More vocal were shareholder advisory firms ISS and Glass Lewis & Co., who this year campaigned for shareholders to vote against her re-election to the board.

However, it should be pointed out that the Botin family in fact only controls 2% of the shares. Hence, they are all subject to shareholders’ oversight. As well, a family’s control can also be beneficial, as Germany’s renowned Mittelstand firms has demonstrated, if it confers a more medium-term oriented outlook – ironically something which is not always the main interest of shareholders.

In any case, the board’s decision was unanimous.

Nevertheless, it will not be easy to replicate her father's shrewdness. He took the bank global, taking advantage of successive financial crises, first in Spain and then in Brazil and the United Kingdom, to enlarge its footprint in a sector well-known for being loathe to allow new entrants, much less foreign ones - particularly in Continental Europe.

On a more fundamental note, investors tend to prize profitability above all else. Although their horizon can sometimes be too short, as the most recent financial crisis proved, Santander does lag rivals such as JP Morgan or Goldman Sachs on this front.

Shares of Santander ended the session 0.65% lower at €7.7.