×

Santander buyout 'smacks of' Lloyds bailout debacle, says leading UK fund manager CEO

Santander's takeover of struggling Spanish banking peer Banco Popular has elements reminiscent of the takeover of Britain's failing HBOS by fellow U.K. bank Lloyds in 2009, according to the chief of a leading U.K. fund manager.

Without knowing the full facts, it looks as though Santander might have been lent on by the European Central Bank (ECB) to carry out the rescue mission, suggested Martin Gilbert, chief executive officer (CEO) of Aberdeen Asset Management, talking on CNBC's Squawk Box on Wednesday.

"It smacks a bit of the Bank of Scotland (HBOS) / Lloyds where you never know how much pressure is put on the biggest bank in Spain by the central bank so I'd be surprised if they had agreed to it under duress but that will come out," he said.

The ECB announced in a statement on Wednesday that the "significant deterioration of the liquidity situation of the bank in recent days led to a determination that the entity would have, in the near future, been unable to pay its debts or other liabilities as they fell due."

Santander is set to launch a rights issue to raise 7 billion euro ($7.89 billion) to support the buyout and the subsequent shoring up of its junior peer's balance sheet as part of the 7.9 billion euros Santander is setting aside to cover the target's non-performing assets.

Turning to mergers across the broader European financial sector, Gilbert said that given the number of headwinds facing fund managers, such as the rise of passive, more regulation and fee pressure, being bigger certainly helps.

His own firm is currently in the process of merging with domestic rival Standard Life to create an £11 billion asset management giant, described by Gilbert as a "financial powerhouse".

"The common wisdom in the sector is you either want to be very big or small. The place not to be is that middle ground where you don't have the revenue…to cushion you against these headwinds which are hitting the sector," he asserted.

The merger has faced criticism for its intention to retain both existing CEOs to serve as co-CEOs – a structure which many commentators say has a long track record of poor outcomes.

Yet the complimentary skillsets each boss brings to the table – with Standard Life's Keith Skeoch focusing on internal asset management and Gilbert preferring external facing lines of work such as distribution and strategy – means this will be a success, declared the Aberdeen CEO.

"It'll work, it'll work – I'm absolutely certain this will work. And I suspect if it doesn't we'll both be going!"

180258045PM00005_TSB_RETURN
Peter Macdiarmid | Getty Images

Follow CNBC International on Twitter and Facebook.