The CEO of Banco Santander SA, the largest bank in the eurozone by market value, resigned today after past legal trouble stirred up controversy.
Alfredo Saenz, 70, helped transform Santander from a provincial bank into a global institution after becoming CEO in 2002, the New York Times reported.
However, his reputation was damaged by a criminal conviction he received in 2009 for making false criminal accusations against indebted clients when he was the head of a different bank in the early 1990s, according to the Wall Street Journal.
He lost an appeal in 2011 but was saved from serving three months in jail by the Spanish government, which pardoned him.
When the Spanish Supreme Court ruled that Saenz’s pardon didn’t exempt him from an industry-wide ban on bankers with criminal convictions, the government lifted the automatic ban, sparking criticism.
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Spain’s central bank was due to make a final decision in the next month about whether Saenz was eligible to continue to work as a banker. “Maybe it was too risky for Santander to be exposed to an inconvenient decision by the Bank of Spain in the next three or four weeks,” Robert Tornabell, professor of banking at the Esade business school in Barcelona, told the New York Times.
A Spanish central bank spokesman told the Wall Street Journal that Saenz's resignation was a "positive step" that should have a "favorable effect on the stability of Spain's financial sector.”
While the news of Saenz’s departure was unexpected, the Financial Times reported that the bigger surprise today was the announcement of who his replacement is.
The bank said that Javier Marín, the 46-year-old head of Santander’s insurance and asset management division and a former personal assistant to Emilio Botín, Santander’s executive chairman, will become CEO.
“This is a big surprise,” Juan Pablo López, a banking analyst at Espirito Santo, told the Financial Times. “He has had a much lower profile than other possible candidates, and is much younger. There are not many people who will have heard of him before today.”
One investor told the Financial Times that the appointment of such a young and relatively inexperienced banker to the chief executive role suggests Botín wants to increase his control over Santander. “This allows him to command the bank even more fully,” the investor said. “This is a demotion of the CEO role.”