Miguel Ángel Prieto (Madrid, 1967) is the General Manager of Banco de Depósitos, a bank that was once a subsidiary of Banco Popular and is now part of Caja Rural de Almendralejo. He began working at Banco Popular in 1993. Two years later, Ricardo Lacasa, then CEO, suggested that he join the President’s Office. Lacasa knew him because they had worked in the same building, the bank’s headquarters in the Goya building in Madrid. Luis Valls himself tested him before allowing him to join his office. In the summer of 1995, he joined as assistant to Ángel Rivera, the president’s secretary. He was 28 years old. He stayed with the president for almost eleven years—of the 32 years Valls led the bank—until his passing in February 2006. This long period allowed Prieto to gain a deep understanding of the former Banco Popular president, perhaps more than most people.

Prieto believes that Luis Valls was inspired by the great American magnates who had designed foundations for their social projects in the 1960s, aiming to help the less fortunate. In his view, the fact that the former president belonged to Opus Dei did not influence the aid given to members of this organization, although many of “the clients” had a religious nature.

This executive recalls the former president’s sense of humor, “the Catalan wit he always had.” He adds that his intelligence “was overwhelming, which, combined with his experience, meant you always learned something being when you were with him.” Luis Valls donated part of his salary to social foundations. Even so, Prieto recalls his salary was not very high: “I believe he was the lowest-paid president in major banking,” he comments.

THE CHARACTER OF LUIS VALLS

Question. Let’s start with some details of Luis Valls’ life. Can you describe the beginnings of his professional life?
Answer. In the 1950s, after finishing his studies, Valls earned his doctorate and came to Madrid; he began working at the Higher Council for Scientific Research (CSIC) because his father, a historian, had published extensively with the Council. He was also an assistant professor at the Autonomous University (then known as the Central University) and later he joined Banco Popular.

Q. What was his work routine like in the President’s Office?
A. Practically from nine in the morning until nine at night. He almost always had lunch at the bank with people who interested him because they provided data, information, and context…; they told him about the most interesting affairs of the moment. He was one of the best-informed people in the sector. As he got older and his health began to decline, he reduced his hours and would leave around 7:30 p.m. He always surrounded himself with intelligent and hardworking people; he was good at delegating tasks.

Q. When did his illness start to worsen?
A. From the summer of 2005, he began to feel weaker and more tired. He decided to work from home and reduced his visits to the bank. He had leukaemia and underwent radiation therapy. Despite this physical deterioration, he maintained complete mental clarity until the end.

Q. Did he worry about articles being published that talked about his deterioration, which was visible on some occasions at shareholder meetings?
A. No, not at all. He had been through more challenging moments, like his confrontation with Ruiz Mateos; he lived the final stage of his life without bothering about how others saw him.

Q. Before this situation, he stepped down from the executive presidency and remained chairman of the shareholders’ meeting. How was the transition handled?
A. In 2004, he stepped down, and a co-presidency was established between his brother Javier Valls and Ángel Ron. His role was as chairman of the shareholders’ meeting; although he said he felt like a “scarecrow,” he continued to follow Banco Popular’s affairs with great interest, although he no longer had an executive role.

Q. Leaving the presidency of Popular, a position he had held for 32 years, from 1972 to 2004, must have been difficult, I suppose?
A. It was a meditated decision. He felt pressure from investors because although he didn’t have an executive role, his command was absolute. In any event, he never had signing authority at the bank, which was an unusual detail, but it’s true. What’s more, almost all the other bank presidents of his time had already been replaced—Botín Sr., Sánchez Asiaín, Pedro Toledo, Alfonso Escámez, and José María Amusátegui—I think he understood that it was a different era, and it was time for a change.

Q. As chairman of the shareholders’ meeting, did he maintain control over the two co-presidents, Javier Valls and Ángel Ron?
A. Well, his moral authority was so significant that, of course, he had the ability to ensure that this new tandem worked without conflicts. Javier played a vital institutional and representative role, but the executive weight fell on Ángel, who had the whole bank in his head. Javier left the co-presidency in March 2006, a month after his brother’s death; by then, the co-presidency with Ron had lasted two years.

SOCIAL WORLD

Q. These interviews aim to learn about the social aspect of Luis Valls’ management. How was the work organized in the President’s Office? What was your role in supporting social work?
A. My job was to handle the requests that came to us or that Valls himself proposed; many were quite varied and had little information. I remember one of the first requests was to locate a convent in the Jerte Valley because someone had told him that the nuns needed money for repairs. There was no internet, so we worked with the phone book, calling one place after another until we found what we were looking for.

On another occasion, he asked me to find a person who had appeared on a television show and had mentioned a personal problem or to find the mayor of a town in Badajoz. He would tell me, “Go there, he’s waiting for you,” in a mysterious tone.

Q. Where did Luis Valls get his inspiration for organizing social aid and foundations?
A. From the Americans and the French, who had already developed corporate social responsibility; they worked on the idea that a part of what was earned should be returned to society. Nowadays, there is a lot of talk about Corporate Social Responsibility (CSR), but it’s a topic that has been around since the 1970s. Back then, the importance of the social balance sheet published by some companies, which reflected what they did for employees, their families, clients, etc., was already mentioned. With his social action, Valls anticipated the concept of financial exclusion. He knew there were people who, if they went to a bank without contracts or guarantees, would not pass the risk evaluation, and no one would lend them money.

Q. When did he first publicly express his social principles?
A. He explicitly outlined them in the report to the shareholders’ meeting in 1981 and discussed this issue in the bank’s annual reports. Starting in 2004, the CSR report was published. Valls was against mandatory CSR because he believed it should be voluntary; what he considered mandatory was making money, which was the necessary condition.

Q. What structure did Popular’s social work have?
A. In the last years of Ángel Ron’s presidency, the bank’s contributions were directed to the Fundación Hispánica, which led social projects. In fact, the Foundation was renamed ‘Hispánica-Grupo Banco Popular,’ as one of its goals was to support the bank’s social and institutional activities, and despite being a pioneer entity in channelling its social activity through a foundation, it did not bear the bank’s name. In the agreement signed in 2008, the objectives to be addressed were defined.

Q. What role did Banco de Depósitos play in Popular’s social work?
A. It had a relevant function; in reality, it was a branch of Popular without being Popular, and at the same time, it complemented the foundations. Many affairs were handled by Banco de Depósitos, a multitude of operations, and a large number of institutions, people, or entities that, for various reasons, did not fit in with Popular. The reason for acquiring this license is curious: the president always wanted to have a savings bank, but the Bank of Spain did not authorize him. He liked the social aspect of the savings banks, which were also non-profit and had no shareholders. In fact, he came to control a savings bank; it was emptied, returning all deposits to its customers, and that way, it could be entirely devoted to social purposes.

Q. What type of clients did Banco de Depósitos serve?
A. As part of its social work, it dealt with the people Popular could not finance—providing loans, credits, and guarantees—because they did not meet the solvency guarantees; but money was not given away. These were loans of honor. One of Luis Valls’s principles was that gifted money is not valued. He never wanted to give money outright, which is why Banco de Depósitos made financing more flexible; but it had to be repaid.

Q. Today, does Banco de Depósitos continue providing social assistance?
A. Our strategic plan reflects that we are a bank with strong Christian and Catholic convictions, although this does not exclude anyone of a different faith. This means that the bank does not engage in speculation; it needs to make a profit to maintain its employees and compensate those who have invested capital, which in our case is Caja Rural de Almendralejo. However, we have a social vocation. The fact that the owner is a savings bank gives this institution its character. We are small, with only one office in Madrid, but we have never operated at a loss. Luis Valls explained it well in a 1981 report to shareholders: “While a large industry can sustain losses for one or more years without affecting its solvency or business, profitability is of the utmost importance for a bank. Therefore, the consequences of profits or losses for a bank are not comparable to those of other companies.”

Q. What does not to speculate mean?
A. It means we finance companies, projects, and activities that promote value creation, personal development, and societal progress. We do not seek short-term profits or engage in quick buy-sell transactions. We often have clients who propose real estate purchases… We strongly support SMEs, professionals, and students.

Q. Regarding your work at Popular, what roles did you hold in the bank’s social sector?
A. From 2006 to 2013, I was the Director of Social Responsibility and Director of the Foundation. That year, I took a leave of absence and started managing Banco de Depósitos. I was very attracted to the social aspect because I learned it from Luis Valls and was attracted to the work being done here.

Q. Did the bank’s executives handle this social work?
A. No, Luis Valls believed that the bank’s executives should be free from this task so they could dedicate their time to their roles and responsibilities. Those of us working around the Office and its environment handled these issues. He used to say that a branch manager is not the best contact for an NGO.

Q: Did the Foundations and Banco de Depósitos offer micro loans with personal guarantees?
A: Yes, Luis Valls trusted the word of those asking for help and could lend money without guarantees because he believed in the person and the project they intended to undertake. Interest rates were less than half market rates, and repayment terms were extended. The client’s income was always taken into consideration to ensure that the repayment amount was reasonable and not overwhelming. However, it was never a channel to cover problem clients of Popular.

Q: Who were the recipients of the funds, individuals or other foundations?
A: Both. Luis Valls, the board members, and key clients were sometimes aware of other foundations working in Asia, Africa, or America. Of course, there are also Spanish foundations. We collaborated with the Prince of Asturias Foundation, FEDEA, the Foundation for Business and Society, the Foundation Against Drug Addiction, the Galicia Immigration Foundation, etc.

Q: Were religious orders regular clients?
A: During the period of Luis Valls and Ángel Ron, they were a significant group for the bank due to the relationship, trust, and treatment they received. Luis Valls was aware that many religious orders were “marginalized” in the financial system, not receiving special attention or tailored financing solutions. Nevertheless, professional judgement prevailed, and the risk department had the final say in approving a proposal. Luis Valls never imposed his views or exercised a “casting vote.” If the head of risk did not approve the operation, it was not approved. They were indeed a part of our portfolio. I recall when I opposed a loan, and Luis Valls told me, “Think again; maybe instead of refusing them everything, we could give them part of the money to repair a section of the convent.”

Some orders worked for the bank to repay the loan: some nuns stuffed envelopes for Popular, others sent commercial emails with new computers, and others improved their bakery to sell products, etc. I remember that no one lent to the orders to maintain or improve  their convents at that time.

Q: Did you support students?
A: Initially, Banco de Depósitos handled student financing. Once again, it was challenging for a resource-strapped student to pass the risk analysis. Later, Popular launched an ambitious financing program for students at the University of Navarra, where the Foundation, if conditions were met, covered up to 75% of the interest on the student’s loan. Thousands benefited from this program.

Sometimes, the entire tuition of resource-strapped students was paid, and the loan amount was reduced if they had good grades. The idea was for them to repay the money once they started working. .We eventually had over 2,000 students spread across the world. Sometimes, their parents guaranteed the loans because they didn’t have enough money to pay for the university.

Q. How did you reach those in need of help?
A. Through many channels, but sometimes because they wrote letters asking for support. Every request was responded to, even to say no. It was a lot of work, but Luis Valls considered it essential. Some people were known to Popular employees but knew the institution couldn’t lend them money. Occasionally, cases were known through the press. We would investigate and usually find them.

Q. What was the default rate?
A. It is very low, around 0.25%. On one occasion, it exceeded 2%, but that was due to a significant operation that went wrong, and we later resolved the issue.

Q. What were the most significant projects?
A. I believe all the projects are related to troubled neighborhood kids. In those years, there was a lot of drug use, and the goal was to get them out of that environment and into education. I remember working closely with Enrique de Castor, a priest from Vallecas known as the “red priest,” who had an essential role with the neighborhood youth, children of drug addicts, etc. These were projects in which the bank had no business getting involved.

Sometimes, we would get calls from various people, like a group of nurses going to Cuba on vacation to teach others who needed financing for their trip and stay. Other times, we financed an NGO that ran a large hospital in the Congo. There were also many educational projects or school construction projects.

Q. Was the Ciudad de los Muchachos in Leganés a particular project?
A. Undoubtedly, it was one of the great projects carried out through one of the foundations. They requested help, and Luis Valls paid them a visit to see what the environment was like. The person in charge was the well-known Tío Alberto, whom Luis Valls interviewed many times before handing over the money. He would ask the neighbors and people who knew them; it was a method he often used to gather information. If he trusted you and you let him down, you paid dearly for it. Valls was a Christian and forgiving, but he said that if someone misbehaved, they would not be assisted again. Luis Valls would forgive mistakes but not deceit.

Q. Were there other notable projects?
A. There were projects of all kinds, some led by the economist Sala I Martín, who has a clear pro-independence bias, and another with the Ramón Rubial Foundation of the PSOE for Spanish prisoners around the world, many of whom were involved in drug trafficking, etc. Other support went to associations related to Comisiones Obreras; they were very diverse.

Q. Why did Popular never advertise its social work?
A. For Luis Valls, this help was given out of personal conviction; he believed that advertising this was wrong, because it would be looking for social recognition, while he did it out of a belief that one should help others. There was also a practical reason: if I tell people I’m giving out aid, tomorrow, many will ask, leading to a comparitive grievance he tried to avoid. Moreover, there weren’t enough resources in the foundations for massive requests.

Q. Did Luis Valls’s membership in Opus Dei mean there was a special relationship with its centers or parishes?
A. Luis Valls didn’t surround himself with Opus Dei members. I’ve never belonged to Opus Dei; being a member was not a prerequisite for working on his team. Neither I nor any of the Presidency Directors belonged to the organization.

He clearly distinguished between the bank and Opus Dei. There was no special financing relationship because of membership. On one occasion, a significant person from Opus Dei asked him to remove UNICEF cards from the branches because, according to him, it was a pro-abortion organization. Valls investigated and refused. He did not involve the bank with his religious vocation. Most of the bank’s executives did not belong to Opus Dei.

Q. But you did have a close relationship with the University of Navarra…
A. Yes, there was an excellent institutional relationship between the entities and the students; we had similar relationships with the Complutense University, the Pontifical University of Comillas, or Carlos III University. The relationship was driven by the students, who, if they met the requirements, were financed for their studies, regardless of where they studied.

The University of Navarra was considered one of the best in Spain. We gave loans to students to cover expenses or tuition, but not in a special way.

Q. Did you support non-Catholic educational centers?
A. Yes, both centers and individuals who were not Catholic, for example, Muslims. One of the NGOs we collaborated with helped troubled kids, most of whom were Muslim and of immigrant origin. Another NGO focused on creating jobs for young people in northern Morocco by teaching them to cultivate the land.

Q. How were decisions made about who to help and who to leave out?
A. Luis Valls tried to see most of the organizations that requested help; he studied them, and relied heavily on his ability to analyse people and his intuition. We made some mistakes because a few deceived us, but there weren’t many. Over time, we ended up with well-known, friendly foundations that we collaborated with regularly because they performed specific work in areas we couldn’t reach. They were involved in assistance, education, women’s promotion, cultural activities, helping students, immigrant integration, people with disabilities, and research professors. There were also some focused on heritage conservation and promotion.

Q. Were they always non-profit foundations?
A. Yes, they were established in Africa, Latin America, or Asia; it was the only way to reach these corners, like the children of the Sahara, for example. We couldn’t go there ourselves, but we could find someone already on the ground doing a good job. This avoided duplicating money invested in goals where NGOs were already working. That was the method.

Q. Was there financial control of all the aid?
A. Yes, Luis Valls strongly supported transparency, and he practiced it in his personal and professional life. Additionally, we had a balance sheet delivered to the Foundation Protectorate, which is part of the Ministry of Culture and was the accounting basis for annual accounts, including dates and amounts given, grouped by type. Some aid was long-term, like investments to build a school in Kenya, which was also done.

Q. Once Santander buys Popular, all the companies and foundations are grouped into the Fundación Hispánica. Is that right?
A. Well, in the last years of Ángel Ron’s presidency, the foundations were grouped under the name Fundación Hispánica. It was called Fundación Hispánica, Grupo Popular. It became the Foundation of Banco Popular and received financial support from the bank, later changing its name to Fundación Banco Popular. It had an agreement that stipulated what could be invested. With the arrival of Santander, it became independent and operated autonomously.

Q. The foundations and companies could deduct the corresponding taxes…
A. I suppose so, although that was never Luis Valls’s goal.

Q. Were there volunteer programs with employees?
A. We conducted internal surveys with employees and found that many were willing to participate in social work and provide financial support to specific foundations, such as aiding people with intellectual disabilities, abused women, nature conservation, and tree planting. During my time as CSR director, we launched a volunteer portal accessible to all bank employees and their families. We offered dozens of collaboration opportunities throughout Spain.

INSPIRATION FOR VALLS

Q. What figures did Luis Valls draw inspiration from?
A. He immensely enjoyed reading about Alfred Pritchard Sloan, president of General Motors for over 30 years during the 1930s and considered the father of modern business management. He created a major non-profit foundation. Sloan was where he got the idea for foundations. Another figure he read about was Peter Drucker, considered the father of modern management, who had innovative ideas such as decentralization of large organizations and management by objectives. He also followed Paul Samuelson and Milton Friedman because they were the two most influential economists of the post-war decades. Additionally, he liked reading about historical figures and military strategy. He read a lot about the rise and fall of empires, such as the Spanish empire or the history of Napoleon.