It missed the party ... but bought the guests instead: The rise and rise of Santander

One year ago the champagne corks were popping in the boardrooms of three of Europe's biggest banks.

Royal Bank of Scotland's Sir Fred Goodwin, Fortis's Jean-Paul Votron and Banco Santander's Emilio Botin were toasting the £49bn deal to buy ABN Amro, the biggest bank in the Netherlands.

Dubbed the deal of a generation, RBS would get ABN's investment banking assets, Fortis the domestic Dutch business of the bank, and Spain's Santander the Italian and Brazilian operations. Everyone was happy – at least in public.

But on Wednesday, when the three amigos should be celebrating the first anniversary of the transaction, only one is likely to be on the fizz.

Sir Fred, who since the buyout has been forced to go cap in hand to shareholders in an embarrassing £12bn rights issue, hangs on to his job by a thread. Just last week the City's most feted fund manager of the past 30 years, Fidelity's Anthony Bolton, said he believed that the RBS boss was unlikely to survive the fallout from the credit crisis.

With a £20bn exposure to potentially toxic US mortgage debt sitting on the books of RBS's Citizens subsidiary, Sir Fred's days at the helm do look numbered. Adding to his woes, the sell-off of the company's insurance assets – estimated to be worth as much as £7bn – is on the rocks. The US insurer Allstate, which was being advised by the now-defunct Lehman Brothers, remains the only, but now rather unlikely, bidder in the frame. As one fund manager puts it: "We've given Sir Fred one year to sort all this mess out and then he should go."

In Belgium, Fortis's Votron has already fallen, or perhaps more accurately been pushed, on to his sword. Votron departed in the wake of a £6.5bn capital raising after four years at the helm. The events of the past two weeks – with Fortis being bailed out by the governments of Luxembourg, Belgium and the Netherlands – suggest that Votron left the bank in a rather poorer state than many had thought.

In contrast to his consortium partners, Santander's Botin, a rather squat, bald and by all accounts terribly serious septuagenarian, infamous in the Spanish media for shunning the limelight, has gone from strength to strength as chairman of the bank.

A few years back, Santander, a once-tiny bank from the unfashionable northern Spanish coastal town, seemed rather Luddite in its refusal to dip its toe in the waters of exotic derivatives and mortgage-backed securities. But like Bank of America's straight-walking, straight-talking chief executive, the Southerner Ken Lewis, who recently scooped up the wreckage of Merrill Lynch in the wake of the Lehman collapse, adherence to conservative principles has put the Spanish company on the surest of footings. Santander is now Europe's most predatory bank, with one of the most robust balance sheets in the world.

Unlike the rest of the banking arena, Santander's shares have held up well amid the turmoil. The price has fallen from €€14 (£11) a year ago to around €11 last week, leaving the bank valued at €70bn (£55bn). By contrast shares in RBS have plummeted from nearly £6 to less than £2, valuing the company at £31bn.

What's even more remarkable is that Botin has managed to steer such a course against the backdrop of one of the most turbulent periods in modern financial history – both at home and abroad.

Spain is perhaps facing the most precipitous decline in property values of any country in Europe. Some Spanish savings banks sit on loan-to-value ratios of 180 per cent, with the talk being that the middle banking strata in Spain could be wiped out if the crisis deepens. In contrast, Botin called the top of the market three years ago, selling off the company's properties in a€€4bn deal.

Away from Spanish shores, he has exploited the instability afflicting the US-Anglo banking model by spearheading smash-and-grab raids across Europe, ensnaring two iconic British lenders in the process.

Back in January, along with his chief executive Alfredo Saenz, Botin met his opposite number at Alliance & Leicester, the late Sir Derek Higgs, to table an offer of £5.50 per share for the UK bank. In typical Higgs fashion the approach was bluntly refused. Less than six months later, as the extent of the drought in the wholesale lending markets became apparent, sending A&L into freefall, Botin got his prey for £2.99 a share or around £1.3bn – a price that was described by David Cummings, Standard Life Investment's head of UK equities at the time, as being on "giveaway terms".

Last week the British banking sector doled out more bargains in Botin's direction as Bradford & Bingley, the Yorkshire-based buy-to-let lender that had been suffering a long, lingering death for six months, was finally taken off the life support machine.

Hastily arranged meetings in the corridors of power at Whitehall were convened between the protagonists over last weekend to decide who would be allowed, or indeed would be able, to pour over the carcass of B&B and cherry-pick the savings book. It was a straight duel between HSBC and Santander, with Botin once again winning out in a deal worth £612m for nearly 200 B&B branches. And so he added the northern outfit to his A&L and Abbey businesses.

One deal in a week would probably sate the most voracious of appetites but already talk of Botin pouncing on another distressed banking asset in Europe – this time the ailing Unicredito – has surfaced. The Italian group's share price plunged on talk that it was teetering on the brink, losing a fifth of its value in 24 hours.

While this type of speculation is likely to increase given Santander's relative strength, it's unlikely to sit easily with Botin, his chief executive Alberto Saenz and his top man in the UK, the Abbey chief executive Antonio Horta-Osorio.

"The one thing you can say about Santander is that it has been totally consistent in its strategy," says Marco Troiano, an analyst at Standard & Poor's Equity Research. "One shouldn't look at the acquisitions of Alliance & Leicester and Bradford & Bingley as the start of an aggressive new plan. They were opportunities that came along and were too good to pass up. Santander has plenty on its plate to get on with at the moment. Botin won't pursue growth for growth's sake."

The pursuit of expansion at all costs has, of course, caused others to come unstuck before. Just ask HSBC, whose ill-fated foray with Household International in America ensnared it in the sub-prime imbroglio last February, forcing the bank to make its first profits warning in a 142-year history.

Back in 2005 Santander spent a modest $2.4bn (£1.4bn) taking a 20 per cent stake in US banking giant Sovereign – a deal that came with a two year option to buy the company outright. The option was allowed to expire.

"You can never exclude further expansion in America – they've spoken about it in the past – but I really cannot see Botin going near the place in the current environment," adds Troiano.

In Asia, Santander's Spanish rival Banco Bilbao Vizcaya Argentaria (BBVA) is believed to be keen to increase its presence in the region, but it is unlikely Botin and his team will follow suit.

As one fund manager puts it: "Why would he need to go that far a field? There are plenty of assets he understands on his doorstep in Europe that he can pick off if he wants."

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