4 min read February 2023 — Scott Baldinelli, Executive Vice President, Head of New England Commercial Banking at Santander, spoke with Invest: about the market in Boston. The adoption of ESG initiatives is moving rapidly through the country and Boston is leading the way. Santander’s role in financing the Vineyard Wind 1 project, the largest offshore wind farm in the U.S., has been a local highlight.
What’s the bank’s presence in Boston?
We are headquartered in Boston and are the third-largest bank in the area as measured by total in-state deposits, nearly $28 billion. We have a 6.6% market share in Massachusetts and over 160 locations throughout the state.
Are there any highlights that stand out to you from the past year given the shift in the market?
The unemployment rate remains at historic lows, competition for talent has been fierce across sectors and employers must be creative to retain talent and grow their teams. Significant highlights for me therefore relate to staffing. Institutionally, we look internally first when recruiting talent for new roles. Nearly 50% of our job openings are filled from the current employee base. Our new Head of Middle Market Direct Banking was recently a Relationship Manager covering our Connecticut Market and it has been great to see that team develop so quickly. The same is true of our analyst classes hired during the height of pandemic who are now progressing in their careers. We have also had success hiring externally in an extremely competitive market; I was proud to announce the additions of Pamela Kuong, formerly with Bank of America and Greg Guinee, who joined us from Wells Fargo, to the New England Commercial Banking team in 2022.
Would you say the demand for services in Boston is reflective of their strong sectors?
Absolutely! It all starts with education and healthcare. Strong university and healthcare systems attract people to the region, and they stay because they can find viable employment. Boston is somewhat more affordable than other major economic hubs making it an enticing option to build a business and raise a family.
How do sustainability initiatives play a role in the bank’s operations?
It is certainly something we are looking to support. What is interesting to me is receiving different questions from our customers and prospects. As they look to expand warehouse and distribution space, they are curious about solar panels, windmills and exploring other sustainable energy opportunities. Things are changing very rapidly with regards to ESG interest and adoption.
Do you feel the focus on ESG has been bank-driven or client demand?
At the moment, it is more bank driven and that is the result of our Madrid-based parent company. We have seen more adoption of ESG initiatives throughout Europe. The United States is a bit of a late adopter when compared to Europe, however we are making significant progress and Massachusetts is proving to be on the forefront domestically. For example, my colleagues in Santander Corporate & Invest Banking served as the financial advisor, joint lead arranger and administrative agent for Vineyard Wind 1, the first large-scale, offshore wind farm in the United States. It is expected to generate electricity for more than 400,000 homes and businesses in the Commonwealth of Massachusetts.
What changes have been made in the office to incorporate hybrid or fully remote work?
We continue to have a full-time in-person staff but have also utilized hybrid and remote models. Fully remote options have helped because we can hire out of market when needed. However, it is challenging trying to train or build a culture in a remote environment. Causal interactions, like water cooler conversations, are difficult to replicate. Therefore, we are encouraging people to return to the office. We have invested in technology, retrofitted conference rooms and modified meeting tendencies to ensure productivity when that is not possible.
In this hybrid work environment, how important are in-person meetings to win new business and connect with your clients?
Relationships are 100% built in person. There is a trust factor that’s involved when people are lending and borrowing. Prospecting, however, has changed because the first meeting can absolutely be virtual. We have a long sales cycle and operate in a commodity-driven space, so managing relationships and winning new customers comes down to trust, ideas, and the ability to execute.
What are some of the biggest challenges your clients are facing in the Boston and New England market?
Inflation remains a problem. Supply chain issues and employment concerns are also frequent topics of conversation. We are noticing that companies are not in a hurry to reduce prices but at the same time may be dealing with bloated inventories and are questioning their ability to sell through quickly. There is a lot of economic uncertainty in the market. The good news for employers is that wage inflation seems to have moderated.
How do charity initiatives relate to the mission of the bank and building partnerships?
In 2022, Santander provided $2.3 million in grants across 62 organizations supporting affordable housing, financial education, workforce development, small business development and community services in the Greater Boston area. In addition, last year, Santander employees in the state of Massachusetts volunteered over 6,500 hours, with nearly 2,000 of those in the Greater Boston area. Giving back to the community is part of who we are at Santander. You need to know, work with, and trust those in your community and they need to trust you.
What challenges could impact Boston’s economic landscape in the next few years?
We need an easier way to get people in and out of the city because traffic can be brutal. Businesses may have to consider whether they need office space solely in Boston or if they could operate out of suburban satellite locations. Employee lifestyle may drive such conversations since many people are used to working remotely and no longer want to commute a distance. Also, affordable housing is a big issue nationally; there is a shortage across the country. In order to retain young talent, we need to continue to invest in multi-use real estate and other housing options. We have a prebuilt advantage with our university and healthcare systems but without affordable housing, those become less important.
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