LONDON â€" Alfredo Sáenz, chief executive of Banco Santander, resigned on Monday, less than a week after the Spanish bank reported a 26 percent fall in its first-quarter net profit.
Mr. Sáenz, 70, joined Santander in 1994 after the bank acquired local rival Banesto, and will be replaced by Javier MarÃn Romano, currently head of the firm’s insurance, asset management and private banking operations.
Mr. Sáenz has helped Santander’s chairman, Emilio BotÃn, 78, transform the firm from a regional lender to an international giant with operations from the United States to Poland.
Yet Mr. Sáenz also had faced a series of legal problems, including his conviction in 2009 for making false accusations in the early 1990s in a case involving Banesto. He was later pardoned by Spain’s departing Socialist government in 2011, though the country’s supreme court partly overturned that decision earlier this year.
Santander has also been hurt by the persisting problems in Europe, as well as increasing headwinds in emerging markets like Brazil. Last year, Santander set aside provisions totaling $25 billion to cover a rise in delinquent mortgages in Spain’s struggling economy and an increase in other troubled loans across its businesses.
In Latin America, where the Spanish bank now earns more than half of its net income, a slowdown in economic growth coupled and an increase in troubled loans is starting to cause problems.
First-quarter earnings for the region, for example, fell 18 percent to 988 million euros ($1.3 billion), despite an increase in local lending and customer deposits. The firm’s profit from Continental Europe over the same time period plunged 27 percent, to 307 million euros.
The decision by Mr. Sáenz to step down as Santander’s chief executive follows several months of uncertainty. Spain’s supreme court ruled in February that the country’s previous government had gone too far in its pardon of the Spanish banker, which had raised concerns over Mr. Sáenz’s tenure.
As part of its decision, the court reinstated Mr. Sáenz’s criminal record, which had cast doubt over whether he could continue as a senior executive at Santander. Earlier this month, the current Spanish government passed a law that allows bankers with criminal convictions to continue working in the country’s financial industry. Analysts said the decision for Mr. Sáenz to step down was an attempt to ease the uncertainty surrounding the leadership of the country’s largest bank.
Shares in Santander rose 1.9 percent in morning trading in Madrid on Monday.
A spokesman for Santander declined to comment, while a representative for Mr. Sáenz was not immediately available to comment.
