Santander appoints Castro e Almeida to drive growth in Europe

By Jesús Aguado

MADRID (Reuters) -Santander said on Thursday it has appointed Pedro Castro e Almeida as regional head for Europe as the Spanish bank bets on this region to drive growth.

Castro e Almeida is replacing Antonio Simoes, who has been hired as the new CEO of Britain's Legal and General Group.

As regional chief, Castro e Almeida will be responsible for the bank's units in Europe, including its businesses in Spain, Britain, Poland and Portugal, the bank said.

Castro e Almeida will lead the transformation in the region and report to the group's CEO, Hector Grisi, while remaining CEO of Santander Portugal, a role he has had for the past five years.

In the past, Santander has relied on Latin America for growth to offset the tough conditions for banks in Europe since the 2008 financial crisis. But banks across Europe are now beginning to benefit from higher interest rates despite economic uncertainty.

In the first quarter of 2023, Europe was already the biggest contributor to the group's earnings among its the three main core regions, which also comprise North America and South America.

Santander's first-quarter net profit in Europe rose 17% year-on-year to around 1.2 billion euros ($1.30 billion).

As part of a February strategy update, Santander said its business in Europe would achieve an annual accumulated growth rate of between 7% and 8% in revenues between 2022 and 2025.

It is also targeting a 15% return on tangible equity ratio (ROTE), a measure of profitability, in 2025 for Europe compared with 9.28% by the end of 2022, the biggest increase in percentage points among its three core regions.

The appointment of Castro e Almeida will take effect on September 1, subject to customary approvals, with Simoes continuing in his current position until then, the lender said.

($1 = 0.9252 euros)

(Reporting by Jesús Aguado; editing by Inti Landauro and Jane Merriman)