When Santander Bank decided to expand its middle-market and large corporate environment structured finance and leasing business, they needed someone who had experience starting and running businesses within a corporate platform — a skill that takes demonstrated leadership acumen, coupled with solid credit experience and portfolio management. Vincent Belcastro, now group head of Equipment Finance at Santander Bank, had the leadership and expertise the bank sought.
Extensive Industry Experience
An industry veteran boasting almost 30 years of experience in various roles, Belcastro began his career working across the platforms of both equipment finance and asset-based lending in the Asset-Based Finance division of Banker’s Trust Corporation, first as an analyst and later as a relationship officer. In his next position, he had the opportunity to help turn around a small bank that was part of the Resolution Trust Corporation bailout. “My role there was to help fix, expand and strengthen the equipment finance unit and to manage the collections department,” he says, remembering the turnaround process. “I spent most of my time managing the credit function, collections function of equipment finance and the underwriting group.”
As a risk analyst in the loan review group at Republic National Bank, mostly in Latin America and Europe, Belcastro learned the ropes of heavy equipment usage and underwriting equipment transactions for both above-ground and below-ground mining equipment. “That bank grew quickly, both organically and through acquisitions,” he says. “One of the acquisitions was an Australian banking and mining group from Westpac Bank, so during this time I developed a strong background in mining and metals.”
For about six years Belcastro left the asset-based finance business to serve with Citibank in general mid-corporate and middle-market banking. In 2001, he joined CIT where he took on various roles including asset-based finance to credit leader of the healthcare group. After six years, he was asked to spearhead the restructuring group and wound up in equipment finance again when a portfolio was moved under his management. “The goal was fixing that book and over time we managed it down,” he explains. “I was the driving voice to get that business reestablished; I wrote the business plan and we received board approval to restart that business. In two-and-a-half years that quickly grew to $1 billion of volume.”
Although he has a wide range of skills, Belcastro believes that his leadership abilities will be most valuBrick able in his new position. “I was a proven leader and started four units, for CIT and another at a much smaller bank,” he explains. “Santander hired me to reinvigorate this business and to get it up and running within and across corporate platforms. It’s a terrific opportunity at a bank that has tremendous opportunities.
“My management style is to develop a shared vision of success with my team and a process for getting there,” he says. “Once the processes and goals are set, I work with my team on the execution, monitoring, guiding and performance management of the equipment organization. One of the challenges at any organization in starting or redirecting a group is getting the various constituencies to understand and buy into the effort. To accomplish this, it requires determination, drive and the ability to motivate your team to a common goal.”
On the transaction management side of the business, Belcastro works with his team to avoid getting caught up in the noise, and to ensure they are focused on risk management and good collateral controls. “There was a large transaction that our team previously executed where the client had been in default with its existing lending group and most of the industry did not want to enter into a deal with the company,” he explains. “We were able to see the value in the client and transaction and move to complete a sophisticated term solution with multiple tranches of debt layered into a specific collateral pool. We coordinated a multitude of bank lenders and non-bank lenders across the capital structure to close the deal. This transaction is an example of the leadership required to understand the needs of each client and put them in the solutions that yield positive results.”
Meaningful and Measured Growth
Belcastro has big plans for Santander’s corporate equipment finance business, which he aims to grow in a meaningful and measured manner. His immediate goal is to hire a team of high-performing professionals who will help build a robust client base and best-in-class credit and equipment management strategies. “Most importantly, my goal is to build upon a strong and knowledgeable team while bringing aboard industry professionals who will share the vision of building a best-in-class equipment finance business and growing it in a judicious manner,” he explains. “So far we’ve been fortunate to land experienced industry veterans on the buy-side, indirect originations platform, underwriting and, soon, in equipment management. We’ve laid the groundwork to have a strong core team in our underwriting and risk management groups to become a primary participant and overall leader in the equipment finance business.”
Another of Belcastro’s goals is to make Santander’s equipment finance business available as a product expert to support the bank’s business banking, middle-market, ABL and large corporate businesses, as well as its global banking and markets group. “We’re working internally to increase the level of equipment finance knowledge across our franchise to enable us to accelerate our efforts and to offer our corporate clients a complete financial solution,” he explains. “Equipment finance is always an excellent door-opener that allows our corporate bankers to enter into new relationships by leading with our product.”
Growth in a Competitive Market
In a market awash with competition, Belcastro can pinpoint what sets Santander apart. “We bring a fresh perspective and, certainly, new capital and competitive funding costs to the industry,” he explains. “We’re a local bank with the deep expertise and capabilities of a global bank. We have a significant U.S. platform and we’re also well-known in many parts of the world.”
To achieve significant growth and expand Santander’s middle-market and large, corporate environment, structured finance and leasing business, Belcastro plans to employ a buy-side, direct go-to-market strategy. “We are absolutely focused on good, bank-quality transactions in a wide array and a diverse industry set,” he says, noting that Santander will focus primarily on the industry sectors of distribution logistics, manufacturing, food services, agriculture, healthcare technology, medical services, private aviation, marine and shipping. “We can address that market because we have good capital costs and product expertise,” he explains. “We can service our target market from an overall customer quality experience and there is a national focus. We’ll provide our existing and new clients with flexible, structured financing solutions to enable them to maximize their return on equipment-related investments.”
Belcastro’s greatest concern in today’s market is credit quality of customers. “The market has a lot of participants in it and sometimes we tend to see structures get pushed a little bit,” he explains. “Given the competition, I think the challenge for us will be to continue to book strong credits in the B+ space through investment grade. Along with that, our focus will be to build a diversified portfolio further delineated by a diverse industry representation and asset class differentiation. It can be challenging to grow while continuing to keep the credit metrics where they should be.”
Outlook: Supply-Side Stability
When he looks at the industry as a whole, Belcastro’s outlook continues to be stable from a supply-side. “I think that for the first two quarters companies have been a bit measured in the way they go out and do deals and invest in new equipment,” he says. “However, I think as we move into the third and fourth quarters, we’ll continually see steady growth. I believe we’ll see a drive for updated and new technology in healthcare and in general manufacturing and logistics, to name a few.”
Coupled with that, Belcastro continues to see measured growth in housing, road and general construction equipment. “We’ll most certainly see excavation, heavy truck and aerial lifting equipment sectors; I’d also include energy services,” he adds, referring to companies that service the power grid. “This continues to be a sector that is ripe and deep with investment as we upgrade our power distribution technology. Those are all the sectors we’ll focus on and where I see growth potential.”
Belcastro expects that with the departure of GE, changes are definitely on the horizon within the industry. “This is clearly going to create a fairly large void in the market,” he explains. “But I believe over time the market will address that. For what it’s worth, we’re excited to be growing in this space and I’m looking forward to helping our new and existing clients grow their businesses and to offer equipment finance solutions.”
