Financial institution Santander plans to inject $250 million into its investment bank division.

Santander, the Spanish banking giant, has been making strategic moves to position itself closer to the goals it outlined at an investor day in February. The bank has been focusing on areas where it is strong, such as renewables and infrastructure, to grow its fee business.

Contrary to some speculations, there is no evidence or credible information indicating that a recommendation was given to hire over 100 bankers from the collapsed Swiss bank Credit Suisse at Santander. However, the bank has indeed hired over 100 bankers this year, with most being in the U.S. and more than half coming from Credit Suisse. Héctor Grisi, Santander's CEO, previously spent 18 years at Credit Suisse and recommended many bankers brought over from the collapsed Swiss lender.

The focus on retail and digital consumer banking divisions does not imply a shift away from Santander's corporate and investment bank. In fact, the bank's corporate and investment bank has more than doubled in headcount over the past seven years, from 3,500 to 8,000 staffers. The growth in this sector has been partly due to internal reorganizations.

Ana Botín, Santander's Executive Chair, stated that the opportunity to grow in the U.S. was a logical choice. To support this growth, Santander has allocated $250 million to grow its corporate and investment bank over the next two years.

Santander aims to deepen client relationships by providing access to dollar markets, strategic advice, access to capital markets, and structured transactions. The bank has also created a global digital consumer banking division in September, consolidating its retail and commercial business into a new global unit.

It's important to note that Santander's business model is different from other investment banks, being primarily a corporate bank with a focus on adding fee business. This focus is evident in the bank's goals, which include adding 40 million customers, increasing its return on tangible equity to 15%-17%, and achieving double-digit annual growth in tangible net asset value per share plus dividend per share, all by 2025.

Other banks have also been making changes. PNC and Ally Financial have recently made broader job cuts as part of cost-cutting measures. Goldman Sachs, JPMorgan Chase, TD's Cowen, BMO Capital Markets, and other unspecified banks have made cuts to their investment banking businesses this summer.

Santander has not specified any plans to purchase licensing rights in the mentioned context. The bank's strategic moves, therefore, seem to be focused on organic growth rather than acquisitions.

In conclusion, Santander's strategic moves and hiring spree are part of a larger plan to grow its business, particularly in the U.S., and to deepen client relationships. The bank's focus on fee business and its different business model set it apart from other investment banks, making its moves a fascinating study in strategic banking.

Financial institution Santander plans to inject $250 million into its investment bank division.