For 25 years Luis Valls and his younger brother, Javier, have ruled Spain’s Banco Popular Español like twin absolute monarchs. Together -- Luis as Popular’s strong-willed internal manager and Javier as its gregarious public face -- they have turned the institution that their industrialist family bought in the late 1940s into one of Europe’s most profitable banks by keeping a grip on costs and being conservative.
Now Luis, 78, has decided to step down as co-chairman and head of the bank’s all-powerful executive committee, to make way for younger blood. He has been succeeded by Popular’s CEO of two and a half years, Angel Ron, who is just 42.
Don’t, however, expect any radical departure from the tried-and-true Popular model. “Ron represents continuity without taking a leap in the dark,” says the famously reticent Luis through a bank spokesperson.
The Valls brothers have been unabashedly old-fashioned bankers. Popular never did a big merger with another bank, chased after investment banking fees or tried to go global.
The bank flourished with this no-frills formula. Every year since 1989, 2,300-branch Popular has produced at least a 20 percent return on equity. In the third quarter of this year, its ROE -- almost 27 percent -- was once again the highest of any European bank. Although the brothers today own just 1.4 percent of Popular, which has E60 billion ($76.2 billion) in assets, Luis and Javier have maintained firm control through fiercely loyal directors.
Luis will still appear at the bank’s squat, gray Madrid headquarters most work days, but it won’t be to keep a beady eye on Ron. The scholarly retiree, who belongs to the Catholic lay organization Opus Dei and who has enlivened Popular’s annual
reports with quotations from Lewis Carroll and Friedrich Nietz-sche, intends to visit the bank’s vast eighth-floor library, which houses 12,000 literary, political and sociological works he has collected over the years.
“After spending 14-hour days working to make Popular what it is today, he’s looking forward to a more contemplative life,” says a colleague.
