Banco Santander(US:SAN) 2 1 Shi Ji Jing Ji Bao Dao·2025-07-15 04:03Core Viewpoint - Santander Bank has received approval to establish a branch in Shenzhen, marking its third presence in mainland China, following branches in Shanghai and Beijing, but it has not yet registered as a legal entity bank in the region [1][3]. Group 1: Business Strategy and Local Partnerships - The Shenzhen branch will continue the bank's localization strategy, leveraging its global network to serve domestic enterprises looking to expand internationally, with a key partnership with a leading local bank in Shenzhen [2][5]. - Santander Bank aims to provide financial services to Spanish-speaking citizens and enterprises, focusing on the outward-oriented economy of Shenzhen and the Greater Bay Area [3][5]. - The bank's collaboration with local banks like Shanghai Bank will be crucial, as both institutions have overlapping operational areas but different business focuses, creating a natural complementarity [5][7]. Group 2: Historical Context and Market Position - Santander Bank has a long history in China, having entered the market in 1993 and establishing its first representative office in Beijing, followed by branches in 2008 and 2014 [3][9]. - The bank's asset size reached €1.85 trillion, with a net profit of €13.744 billion in 2024, and it has a significant market presence, being the highest-valued bank in continental Europe as of April 2024 [3][9]. - The bank's strategy of partnering with local city commercial banks has been a consistent approach to expand its influence and service offerings in China, as seen in its collaborations with Beijing Bank and Shanghai Bank [9][10]. Group 3: Regulatory and Operational Challenges - As a non-legal entity bank, Santander's operational scope is limited, which has led to its reliance on partnerships with local banks to enhance its service capabilities and market reach [4][10]. - The bank's focus on cross-border clients and support for its parent bank's expansion in mainland China highlights the strategic importance of these partnerships in navigating regulatory constraints [10][11]. Group 4: Competitive Landscape - Other foreign banks, such as DBS Bank, have also shown a preference for regional banks to enhance their market presence in the Greater Bay Area, indicating a broader trend among foreign financial institutions [11]. - As of the end of 2024, there are 35 foreign banks operating in Shenzhen, with a total asset exceeding 400 billion yuan, showcasing the competitive environment for foreign banks in the region [12].