Could I have misheard? Ana Botin, the chief executive of Santander UK, just described her bank as a "challenger" to the "Big Four". In a market that the Business Secretary Vince Cable is intent on opening up to new competitors, did he really have Santander, with millions of customers, in mind when he called for entrants to overhaul the status quo?
Challenged maybe, for its well-documented problems with customer service, but a challenger? Tell me more.
"We are a challenger bank; let me say that once, twice and three times if necessary because people still sometimes think of us as being very big," says Ms Botin, in urgent, rapid-fire language. "We are big in mortgages, we invested a lot to have a very strong capital base. The challenge is not just in small and medium-sized enterprises (SMEs), our relationships in current accounts and even credit and debit cards are very much behind."
In taking the battle for customers to Barclays, Lloyds, HSBC and Royal Bank of Scotland, Ms Botin has an eye on banking for SMEs with a £300m "breakthrough fund" she is championing.
So while retail customers are being steered to its 123 account, whose advertising features sports stars Jessica Ennis, Jenson Button and Rory McIlroy plugging the benefits of cashback on household bills, Ms Botin also believes there is a gap serving high-growth, risky companies with revenues of up to £12m.
These are the founders who can't find backers to help them move on to the next level without giving away a chunk of equity. So far nine have been backed with a layer of mezzanine finance, including the London salad chain Vital Ingredient, and another 300 are being examined.
On top of the funding, there are trade missions organised to New York and Brazil, and help recruiting bright talent from universities.
Why is she bothering? After all, it takes five times the equity to provide the same amount of financing to an SME compared to a mortgage. And Santander already has 14.6 million retail customers – a legacy from its creation by combining Abbey, Alliance & Leicester and Bradford & Bingley. Ms Botin explains she is intent on rebalancing the bank and that SMEs could make Santander more profitable in the long term.
"That is the reason why last year, this year and probably the year after we will be reducing our mortgage lending," she says, sitting in a meeting room at advertising agency Saatchi & Saatchi where she has just met a group of entrepreneurial hopefuls. Ms Botin, 52, was parachuted into the job more than two years ago when her predecessor, Antonio Horta Osorio, was poached to lead Lloyds Banking Group. She is the daughter of Emilio Botin, the 78-year-old chairman of Spain's giant Santander Group, and a fair bet to succeed him when he eventually retires.
Her business push contrasts with Santander's retail woes, where it has been hit with its share of payment protection insurance provisions and its investment advisers came under fire in a mystery shopping exercise.
"It will never be completely fixed," she says of the retail bank. "You can always do better, OK, but you should see great improvement over the next few years. We want to get it right for everybody but because we have put together three institutions it is very hard because if you are an Alliance & Leicester customer or an Abbey customer you are used to relating to your bank in a certain way. People think it's a current account, but it's not a current account, it's a whole service around a current account."
The industry's focus is clearly on getting lending moving again, despite entrepreneurs complaining that most banks don't understand them. The Government's Funding for Lending Scheme, which is designed to bring down the cost of lending, has livened up the mortgage market but its impact on SMEs is less clear. Either way, rock-bottom interest rates are bad news for people with a nest egg to protect.
"Well, obviously savers are going to suffer," Ms Botin says. "If the Government is funding itself at 2 per cent you know how much are you going to pay savers if you want to lend money at a cheaper rate? People have the incentive to build a factory or open new stores. It is a trade-off."
But Ms Botin believes she has an advantage over other bankers in understanding business because of a three-year stint in technology venture capital when she founded the web consultancy Razona. That broke up a banking career which took her from the JP Morgan trading floor in New York, before returning to Santander, where she led Banesto, its Spanish lender.
"It was incredibly hard but it was incredibly exciting too. I fully sympathise when things don't go as you think they are going to go and you cannot find the right people. I remember trying to hire a finance director. I consider myself to be quite persuasive when I want. I could not convince the people I wanted to come and work with us.
"That is why internships are so important. Bright graduates will either set up their own companies or come and work for us or a consulting firm or government. But going to work for a small company if you are really good? No way."
The do-it-yourself approach to business banking was forced on Santander, which has 5 per cent of the SME market, when a deal to buy a slice of Royal Bank of Scotland that would have tripled its market share in this area fell through after two years of negotiations. Nevertheless, it still expects to double the size of its network of 35 business centres over the next three years. SME lending is growing at 20 per cent a year, albeit from a small base.
If all goes well, Santander should be able to float its UK business, once touted with a value of £20bn, which was put on ice when stock market conditions slumped.
"Santander group strategy is to have listed subsidiaries, we believe that our major banks have to be listed for a very simple reason: if we want to be one of the leading banks in UK, this is a service business and we have to be local, we have to be part of the community."
At group level, Santander already has 1.3 million British shareholders, mainly former Abbey investors who opted for paper when the takeover took place. They haven't fared badly – if you discount the last year when fears over the Spanish economy sent stocks south and the group had to write down lots of property investments.
"Overall, it's been much better than the alternatives, let me leave it at that," she says. It could be worse, I suppose, if the lender was exposed to the Spanish economy. "It's doing a lot better, thank you very much," she says, narrowing her eyes. And will the same be said of Santander as it tries to become the entrepreneur's friend?
The CV: Ana Botin
Born October 1960. Oldest child of Emilio Botin and Paloma O'Shea
Education St Mary's Ascot; Bryn Mawr, Philadelphia; Harvard University
2010 to present Chief executive of Santander UK
2002 – 2010 Ran Banesto
1988 Joins Santander
1981 – 1988 JP Morgan
Had golf coaching from Seve Ballesteros, her brother-in-law
Married with three childrenReuse content