Looks like Santander is coming under a bit of pressure from its own shareholders – Monday’s EGM was not exactly a friendly affair as Reuters reports…
Filed under: Uncategorized Tagged: | emilio botin, lawsuit, madoff, optimal, optimal santander, santander, santander egm
Sorry posted this in the wrong comments box it should be here
Santander announces plans to reimburse pirvate clients. Madrid. 28 January 2009
….. SANTANDER, Spain’s largest bank, offered to reimburse the €1.38 billion ($274 billion) which its private banking clients lost in the alleged fraud by US broker Bernard Madoff in the first such move by a financial institution.
“Santander is offering its private clients the chance to recover 100 per cent of the money which they invested,” said a bank spokesman, adding the offer would not apply to institutional investors.
The offer means private clients will only lose the interest they were supposed to have accrued through Madoff funds.
Santander, the eurozone’s largest bank by market capitalisation, is one of the companies most exposed in the $US50 billion ($73 billion) pyramid scheme Madoff is accused of having run.
In December the bank announced its investment fund Optimal had a total exposure of €2.33 billion to the Madoff scheme while Santander itself was exposed only to the tune of €17 million.
Santander counts some of Spain’s richest people as its private clients, as well as a high number of Latin American investors, especially from Argentina, Brazil and Mexico, according to media reports.
Earlier on Tuesday a Spanish law firm said a class action suit had been filed a day ago in a US court against Santander in the name of investors who say they lost money by investing in the fund.
In a statement, Santander said it would repay the money its private bank clients invested in the Madoff-linked fund in the form of Santander preference shares, which will have an annual coupon of 2 per cent.
“The group has taken this decision given the exceptional circumstances surrounding this case and based exclusively on commercial reasons, given the interest it has in maintaining its business relationship with these clients,” the bank said in a statement.
Javier Cremades, a partner at law firm Cremades & Calvo-Sotelo which had filed the class action suit, told reporters late on Tuesday that the Santander offer “went in the right direction”.
Analysts have said the bank’s link to the Madoff had tarnished Santander’s image, particularly in Latin America which is key to its growth strategy and where it already has a strong presence.
Santander’s offer will cost it €500 million, a figure which will be absorbed in the bank’s results for last year which will be presented on February 5, the statement said.
Santander, which has avoided some of the problems in the US home loan derivatives market that have sunk many of its peers, has forecast a record net profit of €10 billion for 2008.
Bank president Emilio Botin told a shareholder meeting on Monday that he expected to report “magnificent” results for 2008 although he did not mention the €10 billion figure.