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Enrique Rico was named Santander’s global head of trade and working capital solutions in April last year, tasked with overseeing a period of transformation and growth for the Spanish lending giant. 

His first year in the role has been characterised by product innovation, notably the December launch of inventory finance company Invensa, in partnership with Pemberton Asset Management. However, this period has also been one of geopolitical and supply chain upheaval, not least following the introduction of hefty tariffs between the US and its major trading partners.  

In this Trade Leaders Interview, Rico discusses how Santander is adapting its approach to a rapidly changing world. 

 

GTR: It is almost exactly a year since you were named global head of trade and working capital solutions at Santander. Could you tell us a bit about your background and what led you to this point? 

Rico: I’ve been global head of trade for a year, but I have spent around nine years at Santander, in Madrid and the UK. I spent four and a half years as global head of structured trade here in Madrid, and previously to that I was head of structured trade in the UK. 

What has led me to this point is my constant ambition to innovate, which really matches Santander’s culture, as we are constantly encouraged to think outside the box. Also, Santander is a global organisation with multiple clients and stakeholders in many countries, so the ability to connect the dots and lead teams in the same direction is important for the bank, and so it is in life as well. 

It’s been a year but it feels like a lot longer. A lot has happened in the world over the past year. 

 

GTR: What drew you to trade finance in the first place? 

Rico: The reality is it’s about luck. When I first applied to Santander for internships I was allocated to trade finance – I could have been allocated to any other department. But after that I spent some time working in markets, in asset-backed securities sales. It was completely different, and I did that for a couple of years, but the truth is I missed trade finance. The first opportunity that I had to come back to trade, I took it. 

 

GTR: How would you describe your first year as Santander’s global head of trade and working capital, in terms of achievements as well as areas of focus or strategy? 

Rico: 2024 was a strong year for us in terms of revenue and number of transactions closed – internally we don’t only measure revenues, but also the quality of solutions we provide to our clients, and 2024 was a strong year on that front as well. But what has been especially important for us is that we assessed the gaps in our strategy for the coming years.  

For example, inventory finance is one area among others where we’ve spent a lot of time developing a solution. We are also looking at where we can expand into the mid-cap or SME segments of the market, not just the corporate segment, and thinking about how we can tackle the trade finance gap from a financing perspective. 

 

GTR: There are several challenges in the trade finance market at the moment, from long-standing issues such as the trade finance gap, and emerging issues like the escalation of tariffs. Are you viewing these as areas where you can make a difference? 

Rico: There is a huge opportunity there – the latest figure for the trade finance gap was US$2.5tn – so as a bank, if you are able to come up with an interesting proposition you will be able to solve a significant market issue.  

This is a key demand from our clients as well, so we are spending some time thinking about how we can adapt our product offering to tackle this. It is not straightforward as it requires a combination of technological platforms, credit risk models, new channels and so on, but we think there is opportunity for a bank like Santander that has the right setup and huge ambition to grow in trade finance. 

In terms of the tariffs, one thing I think will probably be an outcome is clients will need to diversify their supply chains, meaning diversifying suppliers and buyers, and probably start buying from and selling to smaller companies. That means those companies are very likely to require financing solutions to support their increased flows.   

We should also expect to see an increase in the volume of risk mitigation transactions, such as letters of credit (LCs) and standby LCs, given that companies will likely be a lot less comfortable to sell on an open account basis to counterparties they don’t know. 

I think there is a very important role to play for banks in the current situation and we are definitely committed to playing ours. 

 

GTR: On the impact of tariffs, have you already seen those kinds of supply chain shifts taking shape among your clients, or is it still too early? 

Rico: It’s still a bit early. Those conversations are happening, but the tariffs were only announced early in April. One thing we’re seeing in the short term is around liquidity, with clients looking to diversify or increase liquidity buffers for which working capital is a very interesting tool. 

In the medium term, the tariffs are starting to show the relevance of supply chain security and resilience. It’s not about what will be the cheapest source of supply any more, but about how clients can have a more resilient supply chain. For example, CEOs – rather than procurement officers – are now thinking about how to ensure they have several suppliers in case one stops shipping or it suddenly becomes a lot more expensive to ship. 

That conversation around resilience is starting now with a small proportion of clients, but the number of conversations is increasing every week, a trend that I expect to continue. 

 

GTR: For a client in that situation, what should a bank’s approach look like? 

Rico: Banks will have an important role to play, for example helping clients make advance payments to suppliers so they can secure commercial contracts, providing liquidity to supply on an advanced payment basis, or putting in place supply chain finance programmes to enable suppliers to get access to liquidity. 

Inventory finance is also becoming more relevant – I am sure that a lot of clients would love to have inventory finance programmes in place these days, to be able to ship much quicker without impacting balance sheets or liquidity. Uncertainty and volatility are here to stay, so we expect the number of clients looking to have these solutions in place to increase. 

 

GTR: There have been some concerns that the emergence of tariffs between the US and its trading partners could trigger a significant economic slowdown. Are you concerned that trade flows could be negatively affected in that scenario? 

Rico: There are certain reports that talk about a potential recession, and that is a risk, but if that happens are we going to see trade reducing significantly? I don’t think so. Trade is traditionally resilient when there is a crisis. Perhaps we will see global trade slow down a bit, but we will see clients leveraging more on trade assets to raise liquidity, so I am not concerned about the trade finance business. 

We may see reduced trade flows between China and the US, but also more intra-US flows, and there is an opportunity for us there. We’ll also see more China flows going to Latin America or Europe, for example. 

Then, there are going to be new commercial relationships being entered into, and counterparties might not be comfortable doing that on an open account basis. That probably means more LCs, more supply chain finance, and my personal opinion is we’re going to see an increase in the need for trade finance products overall. 

So again, there will definitely be volatility but also an opportunity for banks to support their clients with the right set of solutions. 

 

GTR: You also mentioned inventory finance. In December, Santander announced it was partnering with Pemberton to launch Invensa, a new inventory finance company. Could you tell us how and why that initiative came about? 

Rico: Inventory was the missing part of working capital. There were plenty of solutions for receivables and payables, but the reality is that until 2020 or 2021 there were very limited solutions on working capital for inventory. We offered inventory from 2012 to 2016 but we paused the product due to lower market demand. 

Around that time, we started doing inventory transactions with third parties, but our clients were demanding a different proposition that third parties are unable to provide. That’s why we set up Invensa, as a joint venture with Pemberton, that solves the issues that the current solutions have. 

We selected Pemberton after a thorough process, because of its knowledge of working capital, experience in inventory finance, and honestly its cultural fit: we are both entrepreneurial and have a strong culture of putting the client first, which is crucial in inventory finance. We add to that our origination, structuring and underwriting capabilities, and the combination of both things creates a unique proposition.  

I have been responsible for the inventory finance product at Santander for several years and I can comfortably say that there are no other solutions like Invensa in the market. 

 

GTR: How would you describe Invensa’s progress so far? 

Rico: The timing for launching this could not have been better. Going back to tariffs and clients strengthening their supply chain resilience, one of the ways to do that is to increase the inventory buffer. 

I have always been very optimistic about inventory finance, but the launch of Invensa exceeded even my most optimistic expectations. We are helping a lot of clients with a unique and impressive proposition.