Having a strong
presence in the US is a crucial part of establishing a global
bank, and it is imperative that banks approach the country with
the correct combination of resources. This was the message from
European bank executives at the FT's US Banking Forum yesterday
in New York.
"For a global bank to
succeed, it has to succeed in the US. That is the bottom line,"
said Scott Powell, CEO of Santander US. "You have to come with
the resources you need to succeed, and we really feel great
about the combination of resources we have and the foundation
we have built in the US."
Powell continued that
the bank's management team has been set up with knowhow to
compete in the US, and that with its global parent's backing is
able to leverage certain things like digital innovations and
cyber infrastructure. "Globally, Santander has 140 million
customers. That scale is going to provide us with some of the
resources we need in the US to succeed long term," he
Joe McGrath, global
head of banking at Barclays, also emphasised the importance of
cracking the US market. In recent years the bank has
recalibrated its global strategy around being a consumer,
corporate and investment bank that is focused around London and
"As part of that
strategy, the US is critical to our success because of the
depth of the market," he said. Barclays is in two primary
businesses in the US; investment banking and consumer business.
It is critical to succeed in a market with this much depth, he
added, saying that he felt the bank had done a good job
leveraging growth prospects in the credit card sector, as well
as building on the strengths it already has.
"Both in the markets
business and in the banking business, we have grown our share
locally over three years and importantly, in this market, the
US accounts for 50% of the overall fees. Over 60% of our
banking business is here in the US," he said.
"Over 60% of our banking
business is here in the US"
"We have gone through a
lot since the financial crisis, but I am very confident that
Barclays' global prospects, and in this region, will go
Given the importance of
the US banking sector for European banks, it is also crucial
that the regulatory system in place is set up to allow foreign
banks to have an actual impact and that new entrants,
established or not, are not regulated out of contention.
According to Powell, European banks compete on a level playing
field to domestic banks as a result of a welcoming regulatory
Fed's regulatory alignment is logical but
The US Federal Reserve
recently finalised tailoring rules for domestic and foreign
banks to more closely match their risk profiles.
The rules introduce a
framework that sorts banks with $100 billion or more in total
assets into four categories based on several factors, including
asset size, cross-jurisdictional activity, reliance on
short-term wholesale funding, nonbank assets, and off-balance
"For Santander in the
US, the category we were put in very much puts us on a level
playing field with other American banks from a capital and
liquidity perspective. We don't think the regulation in the US
hinders our ability to deliver for our customers, and I applaud
the Federal Reserve for taking steps to make the playing field
level for foreign and domestic banks in the US," he said. "I
don't think it gets in the way of anything, and Santander
doesn't feel particularly disadvantaged by it."
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