António Simões
António Simões will start on September 1 and join the top management board © PA

Banco Santander has hired HSBC executive António Simões as its new regional head of Europe, as the Spanish lender looks to cut €1bn of costs and improve flagging performance in the UK and across the continent.

Mr Simões will start on September 1 and join the top management board — subject to regulatory approval and once his gardening leave at HSBC expires — and succeeds Gerry Byrne, a long-serving manager of the Polish business who is retiring next year, the bank said on Tuesday.

He will be charged with implementing a big cost-cutting programme in Britain and Spain, which have failed to keep up with a surge in profits across Latin America.

In the fourth quarter of last year, the UK was Santander’s only market where profits fell on an underlying basis, reflecting intense pressure on margins in the mortgage market. In contrast, earnings in Mexico and Brazil jumped 19 per cent and 16 per cent respectively.

The country heads of Spain, UK, Portugal and Poland will report to Mr Simões, who in turn is managed by José Antonio Álvarez, the group chief executive who was briefly moved aside, then reinstated, when executive chairman Ana Botín tried to hire UBS dealmaker Andrea Orcel last year. The move collapsed in a row over profile and pay and resulted in a pending €100m lawsuit.

The 45-year-old Mr Simões joined HSBC 13 years ago, rising to regional head of UK and Europe before becoming head of global private banking. He announced he would leave the Asia-focused lender after missing out on a bigger role during a strategic revamp in February. Santander was a client of his during a previous job at management consultant McKinsey.

Ms Botín said Mr Simões would be charged with “simplifying our business model and leveraging our digital transformation” in Europe.

He will be part of a triumvirate of regional executives running the bank under Ms Botín, comprising Sergio Rial, South American boss and Brazil CEO, and Héctor Grisi, head of Mexico and North America. Europe contributes about 41 per cent of overall group profit, has 24m customers, 4,900 branches and 70,000 employees.

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