After only a few months at the helm,Banco Santanders(LSE: BNC)(NYSE: SAN.US)new chairman Ana Botn has made some drastic changes to the bank and the way it operates.
Indeed, over the past couple of weeks Santanders management team has been shaken up, the bank conducted a capital raising to bolster its balance sheet, and the dividend has been cut. Alongside these drastic measures, the bank also announced a sharp increase in profit for thethree months to the end of December. Net profit jumped to1.46bn, compared to864m as reported in the same period last year.
Under the leadership ofMs Botn, Santander is now focused on growth anddigital technology is now a key part of the banks growth strategy.
Digital growth
Santander has 92m retail customers globally, of which only12.2m do most of their banking withSantander. Management has stated that it wants to hike this figure to 17m by 2017, which the bank believes could add2bn to 3bn of additional income.
Key to this growth will be the streamlined provision of internet banking services. So, in order to reassure customers about the security of their online accounts,Santander is to be the first global bank to offer cloud data storage services to corporate clients.
This is more than just a move by the bank to improve security. Santander is fighting back againstsome of the worlds biggest technology groups, which are muscling in on Santanders market. If anything, this move should only improve Santanders standing with corporate clients, many of whom are worried about whether or notthey can entrust their data with tech groups.
Its estimated that large established banks could lose a fifth of their consumer banking revenues to digital rivals in the near future.
And Santanders is already making progress expanding its cloud services offering. In particular, the bank has forked out 230m to build a vast data centre in Leicester. The centre is only holding data for the bank at present, but theres room for client data storage. Santander plans to make extra cash by leasing out storage capacity to clients.
Profitable market
If Santanders move into the cloud computing space goes to plan, the bank could have discovered a new, highly profitable revenue stream.Salesforce.com,for example, is one of the worlds largest cloud computing companies and reported a gross profit margin of 76% last year.
In addition, Santander is planning of offers clients a value-added cloud service. Merging cloud computing with other banking services, which will drive demand for the banks new digital offering. As a result, the bank could quickly turn into a fast-growing technology company.
Changing rapidly
Santanders recent overhaul has lead me to change my opinion on the bank and its outlook, as the new management team seems to be focused on growth, as well as stability.
And if you’re also interested in Santander’s prospects then I strongly recommend that you take a closer look at the bank. To help you assess the company, our top analysts have put togetherthis new free report.
The report guidesyou through the seven key steps all successful investors follow before making an investment. And the report teaches you everything you need to know in under 20 minutes!
Don’t delay, this report is only available for a limited time. Soclick hereto download the free report today.
Get FREE Issues of The Motley Fool Collective
Get straightforward advice on whats really happening with the stock markets, direct to your inbox. Help yourself with our FREE email newsletter designed to help you protect and grow your portfolio wealth.
By providing your email address, you consent to receiving further information on our goods and services and those of our business partners. To opt-out of receiving this information click here. All information provided is governed by our Privacy Statement.
Rupert Hargreaves has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.