Javier San Félix, new Head of the Retail Bank in Santander UK / Photo: www.santander.com. Javier San Félix Appointed Head of the Retail Bank in Santander UK
Banco Santander’s Board today approved a series of management and organisational changes which further simplify the Group’s corporate structure and enhance its internal governance: in the Board of Directors, Ignacio Benjumea, General Secretary and Secretary of the Board, will leave his executive role and will become an external Board Director. Juan Rodriguez Inciarte, has resigned from the Board for personal reasons and will leave his role as Senior Executive Vice-President in December this year.
In the Senior Management space, Jaime Pérez Renovales, Senior Executive Vice-President, has been appointed General Secretary and Secretary of the Board effective September 1st. He will lead the newly-created Division of General Secretariat and Human Resources, which will integrate the areas of Legal and Tax and all the areas which were under the former division of Human Resources, Organisation and Costs. Pérez Renovales is a highly accomplished professional who is returning to the Group following a period of 3.5 years in the public sector. Jesús Cepeda, Senior Executive Vice-President and until now Head of Human Resources, Organisation and Costs, will leave his role on September 1st.
Rami Aboukhair, Senior Executive Vice-President of the bank with extensive expertise in retail banking in Spain and the UK, has been appointed country head for Santander Spain, replacing Enrique García Candelas, who will become Vice Chairman of Santander Totta (Portugal) following his great work in Spain.
Javier San Félix has been appointed Head of the Retail Bank in Santander UK, reporting to Nathan Bostock, CEO of Santander UK. Ángel Rivera, Senior Executive Vice-President, has been appointed Head of the Retail and Commercial Banking Division.
In the last few weeks, the following Senior Executive Vice Presidents have also resigned from their roles: Remigio Iglesias (Head of Recoveries); Juan Andrés Yanes who will be replaced as Head of Strategic Alliances by Juan Manuel San Román; Luis Moreno (Head of Private Banking); and José María Espí (Director of Internal Control and Risk Assessment).
The Board of Directors, Santander Spain
Two years ago all the Group’s businesses serving customers in Spain were consolidated under Santander Spain to establish a clear separation between the functions of this unit and the corporate center. Today they are announcing a further step in the process of strengthening Santander Spain by creating a Board to oversee it. This will bring its governance structure in line with the Group model which exists in other country subsidiaries. This Board will monitor and supervise the activities of Santander Spain, including its policies and strategies, risk, human resources and senior management appointments as well as a number of control and monitoring tasks.
The Board of Directors of Banco Santander has appointed Rodrigo Echenique, Vice Chairman of the bank, in the additional role as Chairman of the Board of Santander Spain. The Board of Santander Spain will have at least one third independent directors with the Country Head of Spain (Rami Aboukhair) as a permanent member. The Group has also appointed to the Board of Santander Spain, Ignacio Benjumea, Angel Rivera (Head of the Retail and Commercial Bank Division), José María Nus (Chief Risk Officer), José García Cantera (CFO), Carlos Barrabés, Javier Monzón and Gonzalo Alonso-Tejuca, the last three of whom are independent directors.
According to the bank, the new corporate structure will facilitate work and increase both competitiveness and focus on adding value to the Group’s core local country businesses; and the number of divisions has been reduced from 15 to 10 in the last six months and with today’s changes the number of senior executive vice-presidents is reduced by 7 (or 23%). “We are enhancing the Group’s internal governance with the creation of a board for Santander Spain”. Ana Botín, Santander’s Group Executive Chairman, said: “These changes complete the management team which José Antonio Álvarez and I began restructuring in 2014. To achieve our vision to be the best retail and commercial bank for our people and customers, and to continue to generate sustainable growth we must simplify and make our organisation more competitive”.
“Our goal in making these changes is to have the best qualified professionals in the right roles and progress towards becoming a bank that is Simple Personal and Fair for our people, customers, shareholders and communities”, Ana Botín said.
Josep Oliu, Chairman of Sabadell. UK Authorities Give Green Light to Acquisition of TSB by Sabadell Group
The UK authorities (PRA and FCA) have approved the bid by the Sabadell Group, announced on 17 April 2015, to acquire all of the shares of TSB Banking Group plc which is based in Britain.
With this acquisition, the Sabadell Group is taking a leap forward in its strategy of expanding into other countries, which is one of the pillars of its Triple strategic plan for 2014-2016 (Transformation, Profitability and Internationalization). After the TSB acquisition, 22% of Sabadell’s assets will be located outside Spain, compared with 5% at present.
Josep Oliu, Chairman of Sabadell, says: “Today marks the beginning of a major project. This is a milestone that enables us to enter a market with vast opportunities. We do so in partnership with a well-positioned challenger bank with a prestigious brand backed by a long tradition.
“Furthermore, TSB has a highly professional management team which is successfully delivering its business plan and which is committed to growing TSB further still as part of the Sabadell Group. TSB will enable us to increase our international footprint and diversify our business activities. It’s a major opportunity.”
Paul Pester, CEO of TSB, says: “The deal with the Sabadell Group is a major vote of confidence in TSB. With the extra firepower and fresh perspective of Sabadell, TSB will be stronger and even better placed to build on its position as Britain’s challenger bank. Being part of the Sabadell Group will help TSB bring more competition to the UK market more quickly and help us break the stranglehold the ‘Big Five’ banks have had for far too long.
“TSB and Sabadell have similar values. Both have heritages that date back to the nineteenth century and proud histories of focusing on and supporting hard working local people and businesses.”
The experience accumulated by the Sabadell Group in integrating numerous successful bank acquisitions to date and its extensive knowledge of customer service, particularly in personal and SME banking, will play a key role in generating value in this new phase.
The deal, worth 1.7 billion pounds (2.35 billion euros), to be paid for entirely in cash has a neutral impact on the Sabadell Group’s CET1 ratio. Sabadell believes that Lloyds Banking Group’s contribution of up to 450 million pounds (about 622 million euro) is expected to be more than sufficient to meet the implementation costs of the IT migration onto Sabadell’s platform.
Further, the Group estimates technology synergies of approximately 160 million pounds before taxes (about 221 million euro) in the third full year after completion of the Offer.
. T. Rowe Price Expands Relationship Management Team for Spain and Portugal
T. Rowe Price, the $772.7bn global independent asset manager, has appointed Pedro Masoliver to its client management team in Spain. He will report to Alfonso del Moral the Headof Relationship Management for Spain and Portugal in support of the firm’s drive to increase its share of the intermediary markets in Europe.
Mr. Masoliver joins T. Rowe Price from GBS Finanzas, a multi-family office where he was an Analyst. Prior to that, he was a Senior Fund Analyst at Allfunds Bank, investing consultant department between 2007 and 2012. This new role will see him focus on relationship management for clients in Spain and Portugal as well as supporting the sales drive in both countries.
Alfonso Del Moral, Head of Relationship Management for Spain and Portugal said “Pedro Masoliver is a great addition to the team we are building to support our growth. The experience he brings from the sell-side and as an Analyst will add to our ability to anticipated and service the needs of our clients. I look forward to working closely with him as we develop our business in Spain and Portugal.”
Photo: Julien Sanine. And What If Volatility Came Back to Town?
In the first half of 2015, investors faced a favourable environment, with crude oil prices far below the USD 110 a barrel level to many of us had become accustomed, a euro/US dollar exchange rate of USD 1.05 to USD 1.15 and – last but certainly not least – the announcement in January by the ECB of a full-blown programme of asset purchases (‘quantitative easing’). Reflecting the significance of this macroeconomic news (and the long-awaited signs of an economic recovery), valuations in many asset markets rose to historic highs – if they didn’t exceed them!
Is time for volatility to return?, asked Andrea Mossetto, senior investment specialist, Paris at THEAM, BNP Paribas IP.
After years of relatively calm and clear trends, mainly determined by the decisions of G3 central banks, 2015 might see volatility come back to town. On 3 June, after an abrupt rise in bond yields, ECB President Mario Draghi advised investors to “get used to periods of increased volatility.“
“Financial markets fluctuate in response to many factors including the economic outlook, geopolitical tensions and the policy decisions of central banks. Thus, worse-than-expected economic data and a resurgence of geopolitical concerns can quickly generate tensions and boost volatility. For this reason, monitoring the level of volatility in financial markets is of paramount importance to us”, point out Mossetto.
Isovol: An approach to mastering volatility
This is precisely what THEAM’s Isovol strategy enables BNP Paribas IP to do. By putting volatility back at the heart of portfolio management and defining the volatility of each asset in the portfolio as a fundamental criterion for asset allocating, this strategy is focused on mastering volatility and improving the participation in market trends, explained Mossetto. It bases investment management not solely on a manager’s judgments, but on a relatively simple signal: the volatility of the markets in which they invest.
Volatility-driven exposure can produce attractive results
“In terms of behaviour, in an Isovol strategy, rising markets are naturally being bought and volatile markets are underweighted. The result is a reduction in maximum losses in times of market turbulence. This explains the attractive performance of the strategy in recent years, but also an improved participation in the various uptrends. In recent years, THEAM’s Isovol management strategy has been effective in improving risk-adjusted returns”, said BNP Paribas IP´expert.
Investing in a flexible way, in a multi-asset class universe of international assets, broadly diversified via futures and index trackers, helps give investors a clear view of their exposure.
Thus, the Isovol strategy can be particularly suitable for investors seeking a straightforward and intuitive strategy targeting a stable level of volatility, without sacrificing performance.
CC-BY-SA-2.0, FlickrPhoto: Edward Dalmulder. Fresh Volatility But Renewed Confidence
Fresh volatility on bond and equity markets and- toa lesser extent- in currency trading is not all that surprising. Market volatility had been abnormally low for months as investors piled into the same strategies dictated by the ECB’s massive quantitative easing programme. Two events disrupted the calm; higher-than-expected inflation in Europe which officially marked a sharp reduction in deflation risk (and therefore visibility on the ECB’s QE campaign) and concerns over default risk in Greece or Grexit as talks got bogged clown.
Concerning fixed income, faced with bond market volatility, investors had been reassured by the ECB’s flexibility following comments from Benoít Coeuré that the bank could take advantage of swings to accelerate bond buying. But then Mario Draghi said investors would have to get used to volatility, thereby reducing hopes the ECB would try torein in market pressure. As a result, yields on the 10-year German Bund jumped 80bp between April 20 and June 9 or enough to undermine European equity markets.
At the end of April, we moved to an underweight position on European government bonds as they had become extraordinarily expensive. But the extent of the subsequent fall has led us to turn neutral. Even after this correction, European bonds are still expensive but it seems a done dealthat the ECB will stick to its quantitative easing calendar until its official end date of September 2016. This means that with negative yields on some bond market segments, there is justification for bonds to remain expensive. And generally speaking, we believe it is still too early to position portfolios for the end of quantitative easing. Moreover, we would not be surprised to see other ECB interventions ifyields should rise further as the bank wants to keep real rates neutral to negative to shore up the recovery. Against this backdrop, it makes more sense to remain neutral.
On the equity side, if the bond market correction has in fact come to an end, equity markets should rally. In so far as credit spreads remained rather stable as yields rose, the risk of equity markets being contaminated needs to be put into perspective. Earnings expectations are trending higher in the eurozone and in Japan with fewer and fewer downward revisions in the US, UK and emerging countries. And after the weak spell at the beginning of 2015, the US economy is likely to rev up again, thereby facilitating the incipient recovery in Europe and Japan. We expect upward earnings revisions to continue and help equity markets move higher. We had underweighted UK equities ahead of the elections there but a certain degree of stability has returned and we have turned neutral on the market. The thorny issue of the referendum on whether to stay in the European Union will return to centre stage next year but it is still too earlyto position portfolios to reflect this risk. All together, these developments have led us to increase European equity ratings and equity ratings as a whole.
As well as the return of Russo-Ukrainian tensions, political risk is still acute in Greece where talks are dragging on ahead of sizeable repayments to the IMF scheduled for the end of June. We are sticking with our core scenario that a favorable solution will be found as all parties have an interest in reachingan agreement.
Column by EdRAM. Benjamin Melman is Head of Asset Allocation and Sovereign Debt in Edmond de Rothschild Asset Management (France).
The data, comments and analysis in this document reflect the opinion of Edmond de Rothschild Asset Management (France) and its affiliates with respect to the markets, their trends, regulation and tax issues, on the basis of its own expertise, economic analysis and information currently known to it. However, they shall not under any circumstances be construed as comprising any sort of undertaking or guarantee whatsoever on the part of Edmond deRothschild Asset Management (France). Any investment involves specific risks. Main investment risks: risk of capital loss, equity risk, credit risk and fixed income risk. Any investment involves specific risks. All potential investors must take prior measures and specialist advice in order to analyse the risks and establish his or her own opinion independent of Edmond de Rothschild Asset Management (France) in order to determine the relevance of such an investment to his or her own financial situation.
Special warning for Belgium: Please note that this communication is intended for institutional or professional investors only, as mentioned in the Belgian Law of July 20th, 2004 on certain forms of collective management of investment portfolios This notice is also intended only for investors who are not consumers as described in the Belgian Law of July 14th, 1991 on trade practices and information and protection of consumers.
State Street Global Advisors (SSGA), the asset management arm of State Street Corporation, has announced the appointment of Greg Ehret as president.
Ehret is in charge of SSGA’s client facing, product and marketing, operations and infrastructure teams and will lead the execution of the non-investment aspects of strategy.
Ehret joined SSGA 20 years ago. He has held several executive positions in operations, sales and product development, including co-head of the firm’s exchange traded fund (ETF) business.
Ehret has led SSGA’s business in Europe, the Middle East and Africa (EMEA) from July 2008 to September 2012 including the purchase of the Bank of Ireland Asset Management and managed State Street’s European ETF franchise.
SSGA has $2.4trn of assets under management as of 31 March 2015.
CC-BY-SA-2.0, FlickrPhoto: Loremo
. Energy Efficiency: Global Growth Opportunities
The Henderson Global Growth strategy, which reached its 5-year anniversary in May 2015, seeks to identify key themes driving world change. One of these is greater energy efficiency. This has been a key theme within the portfolio of the Henderson Gartmore Global Growth Fund for a number of years with holdings well placed to benefit from further government initiatives and technological advances.
The quest for greater energy efficiency is being driven by a combination of factors. Firstly, from an environmental perspective, global temperatures are rising and energy related CO2 emissions are a material contributor to this change. Warmer temperatures are linked to higher incidence of extreme weather, which in turn has a disruptive effect on global food production and water supply.
Energy independence
Secondly, carbon fuels are ultimately a finite reserve and intensity of consumption must be curbed while alternative energy sources are developed for mass use. Additionally, energy independence has become a key topic for governments wishing to insulate their economies from fluctuating commodity prices and supply restraints. Confronting these issues, governments in countries covering 80% of global passenger vehicle sales have set stringent targets for fuel economy or emissions.
Increasing fuel efficiency
In the US, for example, the National Highway Traffic Safety Administration (NHTSA) has mandated that the average passenger car’s fuel economy must increase from around 35 miles per gallon (mpg) today to 56mpg by 2025, and other regions and countries are following suit as shown in the chart below.
We believe that in order to meet these government mandated standards, improving the efficiency of the internal combustion engine will be a key consideration for automotive manufacturers for at least the next 10 years.
Smarter engineering
The US Department of Energy estimates that only 18-25% of the energy in gasoline is converted to powering the wheels in the average internal combustion engine powered car, so there is clearly room for gains to be made through smarter engineering.
We invest in companies that manufacture parts and sell technologies which increase the efficiency of the internal combustion engine, and are growing the value of their parts within the car. Stocks currently held related to this theme include Continental, a Germany-based automotive supplier, Valeo, a multinational automotive supplier based in France, along with US auto component manufacturers Delphi and BorgWarner.
Many of the improvements being made by these companies are typically based on proprietary technology, generated through superior engineering and provide the companies with a long-term competitive advantage, which protects their high market shares. The table below shows the positive effects from using various types of car technology on fuel consumption and carbon dioxide emissions.
We believe the market has undervalued the pace and sustainability of the growth which these auto component companies possess, creating an attractive investment proposition today for our funds.
For example, Continental, which the fund has a weighting in of approximately 1.7%, has strong market positions across its powertrain division with a broad portfolio of engine parts from turbochargers to start-stop technology, geared towards increasing fuel efficiency and reducing emissions. Based on our investment criteria, Continental is attractive on a number of measures:
Continental also has one of the market-leading tyre brands and currently trades on 14 times 2016 estimated earnings*. With a rapidly improving balance sheet and strong cash flow generation, investors in Continental have benefited from recent capital growth, as shown in the chart below, as well as a healthy return of cash. We see further upside based on the company’s high exposure to the secular growth areas of carbon dioxide reduction, active safety and in-vehicle infotainment (systems in automobiles that deliver entertainment and information content).
Photo: Conservatives. Good news for Osborne Ahead of Summer Budget
Improving public finance figures in U.K. today gave Chancellor George Osborne a fair wind ahead of his summer Budget on July 8, said Investec´experts. Public sector net borrowing (PSNB) in May, excluding the cost of bank bailouts, was £10.1 billion, a fall of £2.2 billion compared with May last year.
Lower government investment spending, higher VAT receipts and fines levied on banks all helped to generate the improved fiscal outlook.
Alongside May’s figures, the data showed the PSNB figure, again excluding the cost of bank bailouts, for the financial year from April 2014 to March 2015 had been £89.2 billion, down by £9.3 billion on the previous year.
Room to manoeuvre
July 8 will see Mr Osborne deliver his first “Conservative”, as opposed to Coalition, Budget and these figures widen his room for manoeuvre. The justification for having a second Budget after that of March 19 is to start to implement the policies on which it won the May 7 General Election, point out Investec.
Announcing the summer Budget, the Chancellor said: “I don’t want to wait to deliver on the commitments we have made to working people.
“It [the summer Budget] will continue with the balanced plan we have to deal with our debts, invest in our health service and reform welfare to make work pay.”
Welfare savings
The Conservative Government is pledged to axe £12 billion a year in welfare spending but it is not yet clear how most of this will be achieved, explained the firm in its last analysis.
Announcing this second Budget, Mr Osborne said: “We will always protect the most vulnerable, but we also need a welfare system that’s fair to the people who pay for it.”
The best-known welfare pledge is that of reducing the “benefit cap” per household from £26,000 a year to £23,000. But the independent think tank, the Institute for Fiscal Studies (IFS), has noted: “Because in total fewer than 100,000 families would be affected… the policy reduces spending by only £0.1bn.”
Similarly, the pledge to remove housing benefit from 18-21-year-olds would save, again, just £0.1 billion, said the IFS. Overall, it said, the public is still in the dark as to £10.5 billion of annual welfare cuts.
Campaign commitments
On the other side of the equation – spending – critics suggest the Chancellor needs this second Budget to raise the money to pay for uncosted commitments made on the campaign trail when the polls were running neck and neck.
These included a commuter rail fare freeze, a huge increase in free child-care for working parents, an increase in the tax threshold and subsidies for home purchase.
Focus on productivity
Mr Osborne said: “There will be a laser-like focus on making our economy more productive so we raise living standards across our country.”
Britain’s productivity performance has been dire in recent years and output per hour, on the latest figures, is actually slightly lower than it was in 2007. But some fear that poor productivity is the price to be paid for record levels of employment.
The Chancellor himself, speaking to the business lobby group the CBI on May 20, said: “I would much rather have the productivity challenge than the challenge of mass unemployment.”
Photo: FrancPallares, Flickr, Creative Commons. Natixis Global Asset Management Launches New Singapore-Based Expertise Dedicated to Emerging Markets
Natixis Global Asset Management has launched Emerise, a new stock picker Singapore-based expertise dedicated to emerging markets. The firm manages a range of emerging markets equity funds to offer investment solutions that combine long-term growth and portfolio diversification.
The potential of emerging markets remains underestimated by investors: emerging economies represent more than 50% of global GDP, while their market capitalization only accounts for 10%. Furthermore, positive long-term prospects make these markets particularly attractive, both in terms of growth potential and portfolio diversification.
“To meet investors’ long-term expectations, we believe it’s crucial to focus on the original principles of emerging markets investing: growth and diversification,” said Stéphane Mauppin-Higashino, Managing Director of Emerise.
Identifying emerging small & mid cap companies with high growth potential
Based in Singapore and Paris, Emerise relies on local teams and research. Its offering covers all emerging regions – Europe, Asia and Latin America – as well as all market capitalisations, from large caps to small & mid caps. The firm employs an innovative and original index: the MSCI Emerging Markets Investable Market Index – IMI.
Convinced that small & mid cap stocks with strong growth prospects can provide superior returns to other corporate categories, Emerise aims to include such high value-added stocks in all of its portfolios, with the conviction that small & mid cap companies represent the true emerging corporate world.
Offering the upside potential of growth stocks over the long term
As a stock picker, Emerise selects growth stocks combining three key fundamentals: stable earnings growth, solid economic fundamentals and clear competitive edge with high value-added. On-the-ground research and in-depth knowledge of companies’ management teams form the core of its investment philosophy.
Emerise’s fund managers make almost 1,500 company visits every year, analyse approximately 300 companies in depth, and constantly monitor close to 100 of these companies. With an approach combining bottom-up research and a rigorous selection of growth companies, the funds managed by Emerise hold 50 to 70 stocks on average. The portfolios are concentrated to provide investors with the best of the emerging world over the long term. Emerise has four areas of equity expertise: Global emerging, Asia, Emerging Europe, and Latin America.
Emerise’s fund range is distributed via Natixis Global Asset Management’s global distribution platform and is designed for all types of investors, both professional (institutional investors, companies, multimanagers, private banks, IFA5 and banking networks) and non-professional.
. MUFG Investor Services to Acquire UBS Global Asset Management's Alternative Fund Services Business
MUFG Investor Services, the global asset servicing group of Mitsubishi UFJ Financial Group, has reached an agreement with UBS Global Asset Management to acquire its Alternative Fund Services (AFS) business. The transaction is expected to close in fourth quarter 2015, subject to regulatory approvals and customary closing conditions.
“This transaction is part of our strategy to build MUFG Investor Services into an industry-leading administrator, both organically and through acquisitions,” said Junichi Okamoto, Group Head of Integrated Trust Assets Business Group, Deputy President, Mitsubishi UFJ Trust and Banking Corporation.
“AFS’ strong client franchise, global footprint, and notably its strong presence in Asia, are an excellent strategic fit,” he continued. “We are confident that our clients will benefit from the depth of combined resources and capabilities and from our commitment to innovation coupled with AFS’ market-leading technology platform. We welcome AFS to our growing business and look forward to continuing to provide our clients with best-in-class service.”
Ulrich Koerner, President of UBS Global Asset Management, said: “We have a sharp focus on executing our strategy, with a clear goal of delivering best-in-class investment management capabilities to our clients. With this in mind, and in light of the increasing drive towards scale in fund administration, we concluded that the future development of AFS in servicing its clients would be best ensured as part of an organization with a strategic focus on asset servicing.”
“MUFG’s commitment to invest in the client franchise and the people, together with their strong focus on ensuring a seamless transition, were important factors in our decision-making,” Koerner added.
