Santander Central Bank Mandatory Reserves Coverage (MIGA-15006)

  • Argentina
Geographic location where the impacts of the investment may be experienced.
Financial Institutions
  • Multilateral Investment Guarantee Agency (MIGA)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Stage of the project cycle. Stages vary by development bank and can include: pending, approval, implementation, and closed or completed.
Bank Risk Rating
Environmental and social categorization assessed by the development bank as a measure of the planned project’s environmental and social impacts. A higher risk rating may require more due diligence to limit or avoid harm to people and the environment. For example, "A" or "B" are risk categories where "A" represents the highest amount of risk. Results will include projects that specifically recorded a rating, all other projects are marked ‘U’ for "Undisclosed."
Voting Date
Jun 13, 2022
Date when project documentation and funding is reviewed by the Board for consideration and approval. Some development banks will state a "board date" or "decision date." When funding approval is obtained, the legal documents are accepted and signed, the implementation phase begins.
Banco Santander,S.A.
A public entity (government or state-owned) provided with funds or financial support to manage and/or implement a project.
  • Finance
The service or industry focus of the investment. A project can have several sectors.
Investment Type(s)
The categories of the bank investment: loan, grant, guarantee, technical assistance, advisory services, equity and fund.
Investment Amount (USD)
$ 500.00 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Project Cost (USD)
$ 500.00 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Primary Source

Original disclosure @ MIGA website

Updated in EWS May 20, 2022

Disclosed by Bank May 13, 2022

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Project Description
If provided by the financial institution, the Early Warning System Team writes a short summary describing the purported development objective of the project and project components. Review the complete project documentation for a detailed description.


This summary covers equity investments and shareholder loans by Banco Santander S.A. ("Santander") in its subsidiary in Argentina, Banco Santander Argentina S.A. ("Santander Argentina" or the "Bank"). The investor has applied for MIGA guarantees of up to US$500 million in mandatory reserves cover, for a period of up to 2 years. The guarantees are expected to be issued in MIGA's fiscal year 2022.

Spain-based Banco Santander is one of the largest global financial institutions in the world in terms of market capitalization with retail and commercial operations in countries across Europe, Latin America, and North America. Its subsidiary banks abroad are required to maintain reserves at the central banks in their respective jurisdictions, based on the volume of customer deposits that these subsidiaries have. Mandatory reserves contribute to Santander's overall risk-weighted assets (RWA) at the consolidated level, resulting in less headroom for other assets at a given level of capital.


Santander Argentina provides retail and consumer loans, small and medium enterprise (SME) and corporate finance services to clients in Argentina. MIGA previously supported Santander Argentina from 2017 to 2021. For this project, the MIGA guarantee will support all of the Bank's lending activities. MIGA analyzed the Bank's portfolio for types of transactions, tenor, size, industry sectors, and exposure to MIGA's exclusion list. Santander Argentina's portfolio has corporate finance exposure to certain sectors that could have potential significant adverse environmental and social (E&S) risks and impacts such as oil and gas, agriculture and fisheries, construction and chemicals. This project has thus been categorized as FI-1 under MIGA's Policy on Environmental and Social Sustainability (2013).

As of December 2021, about 56% of the Bank's lending is to retail, 33% to corporates, 11% to SMEs. The main sectors supported include agriculture and fisheries, food processing, construction, oil and gas. Santander Argentina has limited exposures to activities on the MIGA Exclusion List.

The main ES considerations of this project relate to Santander Argentina's ability to identify, assess, and manage the E&S risks and impacts associated with its lending activities and the management of labor matters. MIGA analyzed Santander Argentina's portfolio for types of transactions, tenor, size, industry sectors, and exposure to MIGA's Exclusion List. MIGA also analyzed Santander Argentina's E&S risk management procedures in line with the requirements of Performance Standard 1: Assessment and Management of Environmental and Social Risks and Impacts (PS1), and Santander Argentina's labor practices in line with the requirements of Performance Standard 2: Labor and Working Conditions (PS2). The applicable E&S requirements for this project will be: (i) MIGA Exclusion List; (ii) applicable E&S laws and regulations in Argentina; and (iii) MIGA E&S Performance Standards.

Santander Group is an Equator Principles financial institution and is also a signatory to other global sustainable/responsible finance initiatives. As a member of the Santander Group, Santander Argentina aligns its E&S risk management procedures withSantander Group's Environmental, Social and Climate Risk Management Policy. Santander Argentina's E&S risk management system is focused on transactions in four sensitive sectors - (i) mining and metallurgy, (ii) energy, (iii) oil and gas, and (iv) soft commodities. Transactions in these four sensitive sectors are assessed for E&S risks and impacts. The sector policies, reflect amongst other aspects, the E&S issues associated with the sectors, scope of application, best practice standards, as well as prohibited and restricted activities within the sectors. The Sector policies are adapted to consider the particular characteristics and development of the market in which the relevant Santander subsidiary operates. Santander Argentina appointed a dedicated E&S officer who oversees the E&S risk management system. During the time of the previous MIGA engagement (2017 -2021), Santander Argentina satisfactorily implemented MIGA's E&S requirements. The ESMS was subsequently streamlined to focus on the Santander Group's policies and procedures. As such, Santander Argentina will be required to revise and update its ESMS to expand the scope and include all lending activities (excluding retail lending) and incorporate MIGA's E&S requirements into the existing procedures. Santander Argentina has in place an external communication procedure for receiving and addressing E&S concerns and requests for information from third parties, in line with the requirements of PS1.

Santander Argentina's emergency response procedures are in line with the requirements of PS1. In response to the COVID-19 pandemic, Santander Argentina implemented measures to protect employees and clients in line with local requirements. The measures include provision of safety equipment, increased sanitization, work-from-home opportunities for employees and mental health support to employees.

Human resources and labor practices are compliant with the requirements of PS2. Amongst other aspects, Santander Argentina has labor policies and procedures that address terms of employment, recruitment, renumeration, and benefits, grievance management, training and others.

Santander Argentina will be required to report periodically to MIGA on the implementation of the ESMS and application of the Performance Standards.


The aim of MIGA's guarantee is to help Santander Group reduce the risk-weighting of some of its assets, which would lead to a reduction in the Santander's RWA on a consolidated basis. The RWA capacity that is freed up is expected to help Santander Argentina grow the supply of credit, thereby supporting employment and economic reactivation as the country embarks in a transition period battling against external headwinds. The MIGA's coverage would create RWA headroom, freeing up capacity for loan growth. The project will also support increasing access to Women-Owned SMEs and demonstrates the importance of adopting inclusive business models.

The Project is aligned with the World Bank Group country engagement strategy in supporting inclusive recovery by encouraging private invest and job creation. In a context of high economic fragility and a shallow financial sector, the Project will support Santander Argentina's lending activities to the SME, corporate and household segments, increasing access to finance and encouraging credit penetration. The Project is also aligned with MIGA's FY21-23 Strategic Business Outlook under its strategic directions of responding to the COVID-19 crisis by supporting the economic recovery. The Project is also contributing to MIGA's strategic priority of demonstrating leadership on gender.

Investment Description
Here you can find a list of individual development financial institutions that finance the project.

The description of investment type was not available at the time of the snapshot.

Financial Intermediary
A financial intermediary is a bank or financial institution that receives funds from a development bank. A financial intermediary then lends these funds to their clients (private actors) in the form of loans, bonds, guarantees and equity shares. Financial intermediaries include insurance, pension and equity funds. The direct financial relationship is between the development bank and the financial intermediary.

Contact Information
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