Spain's Santander (NYSE: STD) is aiming for its Uruguayan unit to achieve 25-30% annual ROE over the next few years as it consolidates its leading position in the country, Santander Uruguay chairman Jorge Jourdan told BNamericas.
The bank recently received regulatory approval to merge with ABN Amro's subsidiary in Uruguay and will start working as one entity on December 29.
"Over the next few years, I see the bank with growing profitability, with very good ROE indices of 25-30%, with significantly improving efficiency levels and better performing fees," Jourdan said.
Thanks to the merger, Santander Uruguay will become the system's largest private sector player, with 22% and 18.5% respective market shares in loans and deposits.
Santander Uruguay and ABN Amro's Uruguayan unit posted 19.4% and 17.6% respective ROEs for January-November, according to central bank figures.
Jourdan said one of his main goals would be lowering the bank's efficiency ratio by 10 percentage points in three to five years from its current 51%.
To do so, the bank spent US$20mn on a solution designed by Santander's Chilean tech development center Altec to revamp its technology platform and integrate it with ABN Amro's.
The integration process should be completed by November next year, he said.
Going forward, Jourdan said the bank is comfortable with its leading position in the local system, but that it would not relinquish market share despite the fact that lending in Uruguay may see a slowdown in 2009 due to more sluggish GDP growth.
The bank will develop a universal banking approach, leveraging the best experiences from both Santander and ABN Amro and placing its efforts on retail banking to strike a better balance from the current corporate-oriented customer focus, he said.
Santander Uruguay has some US$4bn in assets under management, operates through 40 branches and services 200,000 customers.
Santander formed part of a consortium with the Royal Bank of Scotland (NYSE: RBS) and Fortis that bought ABN Amro in October 2007 for some US$100bn.
Santander paid some US$235mn for ABN Amro's Uruguayan assets.
