The executive chair of the European banking giant Santander Group issued a rallying cry for a common services market in Europe.
While the European Union has made progress toward completing an internal European market, the services sector has remained largely protected from international competition. Cross-border differences in standards and certifications have been criticized for restricting the growth potential of companies across all sectors.
Ana Botin spoke to CNBC Wednesday, shortly after announcing the bank was seeking to cut 1.2 billion euros ($1.35 billion) in costs as part of a drive to hit previous profitability targets. Santander is mainlaind Europe’s largest bank by market capitalization, according to Statista, and is estimated by Botin to be in the top three when measured by total assets.
Botin told CNBC’s Karen Tso that despite the bank’s size, it has only 2 percent of euro zone deposits, highlighting the difference between Europe and the U.S. She said the European Union needed to create a free and single market for services, which account for most of the economy.
“The big American banks, in an economy that is very similar to ours, have much bigger scale. So, the common services market has to happen because 80 percent of our economy is services,” said Botin, before adding: “It is crucial that we have bigger companies, because scale matters.”
European Central Bank Vice President Luis de Guindos recently accused European banks of hurting their own profit margins with high costs and too much competition.
Botin said the ECB’s efforts to prop up the euro zone should not go unnoticed but suggested that more could be done to help out European banks.
“There is no question that when (ECB President) Mario Draghi said in 2012, ‘we’ll do whatever it takes to save the euro,’ he did save the euro. But now we have to think about growth, fair competition, fair regulation, fair taxes for everybody so we have more capital to invest in that transformation.”