Bloomberg Audio Studios, podcasts, radio news. Speaking of banks, it's a beautiful day to talk about banking. In recent months, Santander has overtaken UBS to become the largest bank in continental Europe, but it's also doubling down in the United States as well, where it has a huge presence with open Bank joining us now on abouteen, Executive chair of
Santander open Bank. What an interesting moment to talk about interest rates in banking as well, because you're offering north to four percent and it's among the most attractive rates in the industry. What does this mean in terms of your ambition to pull more money in after you've crossed the five billion dollar.
Threshold expected to be here. Thanks for inviting me. And by the way, I try to open a few open Bank accounts in the makeup room, so I'll come back and check soon. So open Bank is a major step in our US strategy. Is the perfect example of our platform goals where we're building once across the group and it's had a fantastic customer reception. You know, we're one hundred and fifty thousand customers, over five billion in deposits.
And what matter is is that this is great for our shareholders too, because it's lowering our cost of funds allows us to grow faster in our auto landing business. So it's you know, great for our customers, great for our shareholders.
What does it mean for your broader strategy in the United States and the ambition that is here today?
So US is a core strategic market for Santander. We see a huge opportunity for profitable organic growth and this is really important. It has been top three in value creation over the last decade for our shareholders and euros and very importantly, we are focusing on the businesses where we have a competitive advantage and that bring network effects. So we see again tremendous opportunity in the United States.
Can any of that be accomplished through M and A or do you think that mostly will be accomplished through organic growth.
Our aim, as as we have said to shareholders, is to achieve fifteen percent our OT adjusted at twelve percent in the United States this year. We will get there and very importantly, Santan that as a group this year will deliver return on tangible equity or just mentioning that of sixteen and a half close to seventeen percent, which is in gold in well, you know, it would be the third of the major banks. The big banks in the US would be number two or three, I believe.
So what does this mean in terms of how you want to get there? What do you think are going to be the biggest profitability lines? And does any of the US broader strategy from the Trump administration get in the way given the concerns about the macro environment.
Those are like five questions FINALI so let me just first start how we will do it? So for us, you know, we set out in twenty nineteen to become an open financial services platform and very importantly to do things in a way that is simple, personal, unfair for our customers. And that is what we now have embodied in transformation, which is a structural shift in how we operate, so much lower cost to serve, which benefits customers and delivers great returns. A great example is our cost income.
You know, again, the top three banks in this country are around I believe sixty percent. The comparable cost income for US is forty four percent. So we are as competitive or better than most of the banks in the United States. And this is great for our customers. And one transformation is the way we get there.
And the second part of the question was really about the broader landscape here. With so much focus on the US consumer, there is a lot of concern of whether the US consumer is going to feel the pressure of the terror strategy. Do you share those concerns.
So we serve about five million consumers in the United States and the headline is very clear. The US consumer is resilient and the behavior is as good as we expected this year. So there is a normalization of cost of credit vis a VI twenty nineteen, but more or less aligned with twenty nineteen, and what we are seeing is pretty good. Now, if you think about sentiment, that's
another thing. And of course tariffs brings greater uncertainty, and so there is a high probability that you will see consumers and businesses, you know, getting weaker in the next few months. But as of today, US consumer very resilient.
Over and over we hear about investors starting to get somewhat worried about US exceptionalism. Do you think that the US is going to still be the place where capital flows to the most.
So, you know, I'd like to answer that question in two levels. You know, one is US has grown much more than the rest of the world, especially Europe, over the last decade. What happens from here onwards, it's a relative some game, right markets, you measure one against the other. I think the opportunity in Europe today is greater. However, we SANTANDERA deeply committed and we will continue to allocate more organic capital to the United States.
Now, I want to read you a quote recently from Jamie Diamond, who spoke in Ireland saying that the EU in particular has a huge problem at the moment. He says that Europe has gone from ninety percent US GDP to sixty five percent over the last ten to five years, ten to fifteen years. That's not good. He said, you're losing. What do you have to say to Jamie Diamond.
So most of the time I agree with Jamie, he's done a great job. But in this case I don't agree, and I think in Europe the opportunity is huge and there's only upside right now. Europe has strong fundamentals. You know that to GDP is better strong institutions, so strong fundamentals. Second, not all of Europe is the same same way that
Texas is not the same as California or Montana. Right, Southern Europe today has higher growth than most of the United States, with very great opportunities to grow, but last and not least. You know, in terms of relative valuation, if you look at banks, you know we have an rot year as a return of close to seventeen percent. We're treading at eight times earnings, whereas the top three banks in the United States are trading with similar average
returns at twelve to fourteen. So I think this shows why there is a big opportunity to invest in Europe, and I believe that is something which you know, it's not just the banking sector, it's in other sectors. Just need to choose your country, your sector, and your company the right one.
I want to get your view on something large that's happening in the United States right now, because I know you've been thinking about how technology is going to change the business. It's the stable coin legislation that is close to passing. How is something there thinking about stable coins and how you might adopt it in the future if you will adopt it.
So, we don't see stable gone as a revolution. We see it more as an evolution, and we believe that it's critically important that you have responsible players and that it's regulated the right way, as I believe it will happen here in it United States. You need responsible actors like banks that bring compliance, trust and scale, and so I do think it has benefits in terms of being globally interoperable, you know, fast efficient, you know, bank rails
actually can get you there. Also, like if you use how Global Payments API, but it's only now sunkander countries. This is global, So I do think it's you know, there is an opportunity. However, it is in new currency, and so you have to make sure that you understand the risks. It is in new currency and has the risks of a currency.
What are the biggest risks? We hear time and time again that because stable coins have the potential to hold so much by way of you as treasuries, that there is a potential as as market grows over time that it could create some sort of systemic risk. Do you worry about that?
Well, right now it's pretty small, so I don't think that's a systemic risk at this time. I do think if it grows, it's important that you're in the hands of again trusted institutions that are compliant under standard risks unmanage the risks appropriately.
Now before I let you go, Also, I want to get an update because you made a lot of news, A lot of attention was drawn when you had hired teams over from Credit Suite to build up your investment banking franchise as well. Where does this fit into the broader strategy of Santander.
Well, as I was saying before, one transformation is the way that Santander is delivering on the open financial services platform, and the corporate bank was one of the first that we started to transform. The corporate bank at Santander has twenty percent returns. It is serving our customers in our footprint, and the team that we have brought in New York is helping us actually take advantage of those corporate relationships and give them access to the deepest market in the world,
which is the US capital market. So it's a win win, It leverages our network and it's delivering great profitability.
How can US clients expect you to be using technology more as you grow the bank in the United States?
So again, part of the one transformation is open bank. Open bank is built on our own tech, our own platform. It's scales. We have the biggest Open Bank is today the biggest digital bank in Europe. It's up and running in Germany, in Iberia, in Mexico and the United States, and we believe that this will again be a big value add to US consumers. And it's only the first step. We have more products coming in the next twelve months. You will be able to bank with open Bank all your basic banking needs.
Anna Bottein, Executive Chair of san Tandeerra, thank you so much for joining us while you are here in town. Of course, a lot of changes happening and new products being launched. We will keep an eye on all of that.