Santander – investing in Latin American equities through derivatives

Leveraging its expertise and capabilities in western Europe - with leadership positions in Spain and the UK - an aggressive hiring policy targeting professionals exiting from troubled institutions has provided the final edge for it to become a main player in the region's derivatives markets

Due in part to last year's financial turmoil, innovation in derivatives in general and structured products in particular has become less valued. There was a time when issuing new and creative ideas on a regular basis was a given for any bank that wanted to be among the elite structuring banks. That is no longer the case. However, consistencies in delivering diverse products, counterparty risk quality and excelling in post-sale commitment have become precious assets.

"Santander offers a wide range of products and services to its institutional and retail investors without the need to enter into turbulent waters, providing ideas that fit well investors' needs in the Latin American region," says Manuel Villa, global head for equity derivatives at Santander.

Innovation and creativity are still important, but knowledge of the local market, demand for outstanding local service and commitment in the countries has left some banks at one side of the road. Derivatives in several markets of the region may still be developing but combining global capabilities, along with knowledge of local markets, allows Santander to offer a product with which only very few can compete.

To start with, only a handful of banks can offer similar counterparty credentials for investors. Santander's market capitalisation is well over $100 billion. The bank has top credit ratings among financial institutions and is the largest franchise in Latin America. Santander Group is a top three bank in each of the Americas key markets, with a presence in other countries. With this footprint, and its strong presence among institutional investors in the US and Europe, Santander's next challenge is to become the top provider of access to its international client base; to the wide range of equity strategies available locally. The bank keeps expanding its equities team in New York with this objective. Significant recent hires include James Rist, who has been selling derivative products to US hedge funds and institutions for over a decade.