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 Sources familiar with the matter said his eldest daughter Ana Botin,
currently head of Santander's British business, was expected to be
approved as the bank's new chairman at a board meeting later on
Wednesday.
Such a move could spark controversy, with banking dynasties coming
under criticism after a scandal at Portugal's Banco Espirito Santo <BES.L>,
where the founding family's holdings are being investigated over
financial irregularities.
"Succession shouldn't just be saying 'my daughter's going to take
over'," said a corporate governance expert at a global asset manager
which owns Santander shares, speaking on condition of anonymity.
But others said Ana Botin, who has spent most of the last 25 years
at Santander, could provide welcome continuity.
"The key issue is whether or not family control is a good or a bad
thing. Ultimately this depends on individuals and his (Botin's)
daughter is a chip off the old block," said Philip Saunders, co-head
of multi-asset at Investec Asset Management.
"More often than not, family control or strong influence tends to
bolster long termism which is particularly important in a banking
context given that banks typically behave in an overly pro cyclical
manner and destroy shareholder value as a consequence," he said.
If Ana Botin is confirmed as group chairman, it will leave a gap at
Santander's UK arm just as it prepares for a separate listing. UK
Finance Director Nathan Bostock has been lined up as her
replacement, but he only joined a month ago. The UK arm is also
looking for a new chairman.
DEALMAKER
Emilio Botin, "El Presidente" to co-workers and the third generation
of Botins to run Santander, was at the forefront of a drive to
create global banks, offering a one-stop shop to multinational
companies and a range of services to consumers.
He used a keen eye for deals to spread Santander's red-liveried
brand with its stylized 'S' logo around the world, amassing 1.4
trillion euros ($1.8 trillion) of funds and nearly 200,000
employees.
"He was a man who has been able to make Banco Santander the most
important bank of our country," Spanish Prime Minister Mariano Rajoy
told journalists in Parliament.
"I had a meeting with him last week and he was well and in good
form. It has been a surprise and a blow."
Botin shook up Spanish banking with a campaign to attract depositors
in 1989, forcing rivals to compete on price, and bought troubled
Banesto in 1994 to create Spain's biggest bank.
He took advantage of cultural and language ties to expand rapidly
into Latin America, and in 2004 snapped up Britain's Abbey National
for more than 9 billion pounds ($14.5 billion).
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More canny dealmaking followed. In 2007, Santander made 2.4 billion
euros in three weeks through deals to buy and then sell Italian bank
Antonveneta. And while partners RBS and Fortis were driven to seek
state bailouts after a carve up of ABN Amro on the eve of the
financial crisis, Santander emerged comparatively unscathed with the
Dutch group's healthier Brazilian arm.
The expansion helped to shield Santander from the euro zone debt
crisis and Spain's long-running recession, with the bank now making
only about 14 percent of its profit at home.
"UNOFFICIAL KING OF SPAIN"
But it has not been all success. Santander has trailed the total
returns to shareholders delivered in the past 10 years by rivals
JPMorgan and HSBC - two firms Botin liked to measures himself
against, according to colleagues.
There has been controversy too. Botin's family, which owns barely 2
percent of Santander, paid 200 million euros in penalties in 2011 to
avoid charges of tax evasion related to a secret Swiss bank account.
Few doubt Ana Botin, 53, has a strong claim to succeed her father.
But her high profile in the bank has drawn criticism.
Earlier this year two shareholder advisory firms, ISS and Glass
Lewis & Co, recommended shareholders vote against her re-election as
a director - one because it thought Botins were over-represented on
the board, the other because it considered there were not enough
independent members.
In the event, she got the backing of 81.3 percent of the votes,
almost unchanged from three years earlier.
"Botin was the unofficial king of Spain. His death creates
uncertainty and a power vacuum at the top," said a London-based
hedge fund manager, who declined to be named.
"The obvious successor is his daughter Ana, which was always the
plan, but he hasn’t had a proper chance to groom her and install her
as chairwoman before he died so there could be some infighting."
(1 US dollar = 0.6198 British pound)
(1 US dollar = 0.7731 euro)
(Additional reporting by Elisabeth O'Leary and Paul Day in Madrid;
Lionel Laurent, Simon Jessop and Steve Slater in London; Editing by
Mark Potter)
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