Roberto Higuera is an aeronautical engineer, but his first job was at Banco Popular in 1968. He started in a consulting firm that belonged to the bank. From there, his professional life alternated between entering and leaving Popular in an initial phase until he established himself in Financial Management and eventually became CEO. He worked at the entity for almost five decades until his departure in 2017, holding various positions that kept him close to Luis Valls. He even managed the organization of Valls’ Personal Secretariat. Higuera’s testimony is profound and reflective and results from a detailed analysis.

Question. The fact that you joined the bank in 1968 allowed you to witness the long management trajectory of Luis Valls, who joined as a director in 1957 and became president in 1972. He then held the position for 32 years, until 2004. Does his tenure have different phases?
Answer. Yes, he had a very active phase, involved in politics and Spanish cultural life from his early years until 1975, when he became more cautious. From 2001 onwards, he became more withdrawn, affected by illness, including a tremor in his hand that he disliked being noticed. In his later years, he spent much more time in his office, went out less, and met fewer people, but he continued to play an essential role in the banking sector when circumstances required it. For example 1999, during a banking crisis involving Central Hispano, Valls played a very prudent role by preventing Popular from participating in a merger that Santander later led.

Q: Was it common for those close to him to know the reasons, for example, why he chose not to participate in that operation?
A. No, Luis Valls’ reasons rarely reached anyone, beyond the occasional comment that hinted at his motives. However, he didn’t shy away from answering if asked directly. He saw a double presidency as risky and very complex. The Bank of Spain wasn’t involved in the negotiations; it was the initiative of Central Hispano executives before anyone brought Santander into it.

Q: Let’s talk about his early stages as a manager…

A. Yes, during the pre-Transition era, he received and visited many people unrelated to banking, dedicating significant time to these matters. After 1975, I think the political world felt much more distant to him—more fragmented, complicated, and less accessible. From then on, he focused more on banking and sector-related matters, including journalism, although he didn’t completely leave politics and maintained contact with all currents, including the left.

Q: Why was he so interested in journalists and media outlets?

A. For him, having a comprehensive understanding of the situation was crucial, which meant being well-informed, maintaining fluid contact with the press, and having good summaries. He spent considerable daily time meticulously reading news, particularly opinion articles. Additionally, he held numerous meetings with media professionals, including journalists from the press, radio, and television. Politically, it’s been said he was a monarchist, but I think he was, profoundly,y liberal. He valued freedom above all else and believed the State should avoid business matters.

Q: The Rumasa crisis and Ruiz Mateos trials occurred around that time, didn’t they?

A. It’s an example of the delicate issues he faced during his tenure. Another wake-up call was the Banesto crisis in late 1993.

Q: Did Luis Valls fear government intervention in banking, which ultimately never happened?

A. It was a concern that lingered with the arrival of the PSOE to power, considering what Mitterrand had done. There was even fear that Franco might attempt something similar, imitating De Gaulle’s nationalization of French banks. That’s what bank executives said. The subsidiaries that were created, the “Popularinsas,” acted as shields against public control. But he also wanted to thoroughly understand foreign markets—to learn lessons from foreign banking experiences and to have external support for maneuvering during an emergency.

Q: So throughout Popular’s history, the aim was to avoid the State…
A. They sought to avoid State help or collaboration at all costs, as it was considered a danger. This policy remained even with the arrival of Sareb during the 2008 crisis. It was a rejection or fear of political intervention that could force an unwanted merger.

Q: How did Valls manage the bank’s internal operations and control?
A. He knew the bank in great detail. He would retreat to the mountains near Madrid with stacks of documents, studying everything meticulously—from Risk Commission reports to balance sheets and other documents. Despite this, he interfered little in day-to-day management, giving CEOs significant freedom while maintaining close supervision. He allowed them to make decisions and rarely intervened without serious disagreements.

Q: And what if he disagreed with their decisions?

A. A: He allowed it until the disagreements became very serious; then he would replace the CEO, something that typically happened about every four years.

Q: Was he decisive when making tough decisions?
A. He demanded extensive information in complex situations—whether internal crises or external business issues. He was not a man of quick reactions but, once decided, his actions were swift. At the same time, he relied on intuition, experience, and readings to guide his decisions.

Q: Was he harsh with executives he removed from positions due to errors or problems?

A. No, he was caring and affectionate. He did so decisively if someone needed to be removed but ensured they left with dignity, often finding them another position. The only exceptions were cases of disloyalty. Mistakes weren’t the worst thing one could do; fraud or betrayal were intolerable.

Q: It’s said that Valls could have been more concise and communicative with executives…

A. Many tried to interpret his enigmatic expressions because he was cryptic, but he did express his thoughts. People, including CEOs, were often nervous around him due to their respect for him. While his communication style was brief, it could have been more intelligible.

Q: It’s also said he had personal charm, which made him attractive and captivating.

A. He was attractive to women and men alike. The aura of power is always fascinating, but he was also physically appealing, austerely elegant, and charming. He treated people with great courtesy, displaying impeccable manners. He avoided conflicts and was discreet about his personal affairs.

Q: Did he maintain strict control over bank branches?

A. Yes, he encouraged frequent audits, direct inspections, and inquiries with employees and customers about potential complaints. This was essential to prevent irregular practices and even instances of “parallel banking.”

Q: What was his goal with such detailed control?

A. He sought security, maintaining control, and not being overwhelmed by problems. He used to say that if you control the information, there are no surprises. And to avoid surprises, the best approach was to identify weaknesses before others could. That’s why he created the Repertoire of Topics, which was appended to the annual report. The key wasn’t to release information to the market or air internal issues to create a favorable image of the bank in the press, but rather to establish a defensive mechanism. It included anything potentially negative—mistakes made by the bank, employee disloyalties, anything—so that these issues were acknowledged internally before someone else could expose them. It was also a way to inform employees about bad practices and errors to avoid.

Q: But doesn’t that expose you to the market and risk wearing you down?

A. That’s true, but it served as a warning both internally and externally. People praised Popular’s transparency, as it didn’t hide information. It convinced me of the system’s merits. Concealing information is risky, uncontrollable, and therefore should be avoided. There were major stumbles, and they were disclosed there.

Q: If it was such a good strategy, why did they stop including the Repertoire of Topics in the annual reports?

A. It was later discontinued because it came to be seen as anecdotal, something repetitive over the years, primarily intended for internal consumption, and it lost its effectiveness. At the same time, regulatory oversight increased significantly, with supervisors requiring extensive reporting, and the bank’s information to the markets evolved. This made that form of communication unnecessary.

Q: What did Valls seek in the media, books, and films?

A. He looked for lessons in people’s successes and failures, the reasons behind their actions, and the results, using these insights to inform his management decisions.

Q: You mentioned earlier that he took care of the board. How so?

A. It is a little-known fact, but he devoted significant time to engaging with the board members, discussing important matters with them. Even though they were close to him—and they were—he believed it was essential to keep them informed, gather their ideas and concerns, and address any doubts. I consider this an essential trait because he understood that the board was vital; he was fully aware that a divided board could be fatal for a bank. He handled this matter in an exemplary manner, in my opinion, beginning with the careful selection of board members.

Q: Even though many were major shareholders, they weren’t reimbursed.

A. That’s true. Remunerations were redirected to fund foundations. The role was seen as a service to the bank, not for personal gain. Valls carefully selected board members, valuing cohesion for what he considered a unique institution.

Q: Does that mean there were few debates?
A. No, in fact, the relationships within the board were highly variable and, at times, complicated. There were strong personalities with firm ideas and professional influence. For example, in the late 1970s, after the global crisis of 1975 that led to the downfall of English savings banks, two strategic positions clashed within the bank – that is, on the board – one led by Rafael Termes and the other by Luis Valls. That’s a fact. Terms advocated for international expansion, company involvement, and more significant growth within Spain.

Q: What role did the board take?

A. The board debated these strategic guidelines, which extended even to the executives. There were extensive discussions because these strategies involved risks and costs. That touched on two sensitive areas for the bank: costs, due to a mindset of austerity, and dangers, which affected prudence. While there was a certain degree of homogeneity, within that homogeneity there were struggles, but Valls’ approach prevailed. Popular eventually withdrew from the companies it had stakes in, sometimes alongside Banco Bilbao and Vizcaya. It also exited some foreign banks in which it had investments. Termes was respectful and accepted the decision but debated it forcefully.
[Rafael Termes was CEO of Banco Popular from 1966 to 1977 and, after his departure, chaired the Spanish Banking Association (AEB) from its founding in 1977 until 1990.]

Q: Were many board members from Opus Dei?

A. Many Opus Dei members were on the board because they fit the bank’s model, but the president needed to allow them to overstep their role. He kept everyone in their place. This is why some people talk about Opus Dei’s interference in the board. I am not a member of Opus Dei, but I knew how Popular operated in those years, and I can assure you there was no interference from Opus Dei. One of the things Luis Valls avoided most was allowing any power group or individual with outside interests to influence management, as he considered it dangerous—both for management and himself.

Q: But wasn’t Opus Dei central to his life?

A. It was central to his life, and he had absolute faith. But he kept the board within bounds, which meant it didn’t directly intervene in management. Not at all. There was no favoritism toward individuals in the bank simply because they were from Opus Dei.

Q: Were relatives of Opus Dei members hired?

A. Relatives of board members, executives, or employees were not allowed to be hired at the bank. Most executives were not members of Opus Dei.

Q: Gareth Gore’s book, Opus, claims the religious organization “hijacked” the bank to turn it into its “ATM” to fund global expansion and influence. Based on your time at the bank and involvement in its management, do you believe this theory?

A. I think it isn’t very accurate. Popular didn’t operate as a financial structure or support system for Opus Dei. The connection, if any, was through the Foundations—i.e., social assistance—but nothing beyond that. The Foundations helped not only Opus Dei members but also, for example, students unaffiliated with the organization or beneficiaries like nuns’ or friars’ monasteries, regardless of religious or political affiliations, often to address structural problems or lack of repair funds.

Q: Why are you so sure?

A. Because I saw it firsthand. I even visited some of these convents—some of them historic and well-known—that had financial difficulties. They were helped and given work to better repay loans or cover ordinary expenses. If you spoke to any executives from those years, they would tell you the same: they don’t recall being told, “You must finance this because it’s for Opus Dei.” The bank’s operations were entirely independent. Moreover, Valls was adamant that no one interfere, as it was part of his management style to uphold prudence. He aimed to protect the bank from any outside influence, including Opus Dei, if it came to that.

Q: The book suggests that the Shareholders’ Syndicate played a key role in Opus Dei’s control over the bank. Do you agree?

A. The Syndicate wasn’t used for that purpose. It included various people, some employees like myself, who had no connection to Opus Dei. Being a member of the Syndicate didn’t require being part of the organization; the key was agreeing with the management. In return, members were informed of issues, just as we did with foreign investors. I need to find out how many Opus Dei members were in the Syndicate. Its purpose was to ensure its members supported management with their votes during assemblies.

Q: It’s also said that the bank had strong ties with the University of Navarra because of its connection to Opus Dei. Is that true?

A. It’s always been visible that the Foundations provided various types of support to that university, as they did to other institutions in Madrid and beyond, but it was professional. Was there more focus on entities linked to Opus Dei? A significant portion of aid went to organizations unrelated to the group. Indeed, Opus Dei never intervened in Popular’s management. I’m confident there were no calls from the Prelature dictating where funds should be allocated. I probably wouldn’t have stayed at the bank if I had witnessed that manipulation, as it threatened its integrity.

Q: Did Opus Dei influence management indirectly through board members?

A. Board members expressed their opinions at meetings, and those opinions could be uncomfortable for Valls, but he accepted them. There was a debate because the board included strong personalities with significant investments in Popular shares. However, the president never allowed any interference in management.

Q: Why was there so much business with religious institutions?

A. It developed because this was a very attractive market for raising deposits, which were highly valued then, and other banks should have prioritized them. There were all kinds of religious institutions, from dioceses to the Jesuits. They were treated as clients, no more, but with personalized attention due to their specific needs. At one point, deposits from religious institutions equaled the volume of Popular’s subsidiary banks. Additionally, their credit activity was very low, making them low-risk clients.

Q: Returning to management style, it’s said that Valls managed the bank with a timid demeanor…

A. I don’t think he was timid. He gave the impression of timidity due to his polite and respectful behavior, adhering strictly to etiquette. But he was decisive. For example, he was very interested in learning about some foreign banks. Once, he spontaneously visited the president of Bank of America in California and requested a meeting, leaving the president understandably astonished. That encounter led to a friendship between the two, and Popular later adopted Bank of America’s annual report format, including its red covers and similar structure. This anecdote reflects his keen interest in how banking was managed abroad. He also engaged with Morgan Guaranty Trust (now J.P. Morgan) when they entered Spain, offering space in the Beatriz Building in Madrid, where Popular was headquartered. He also proposed assigning someone from Popular to assist them with local financial and business matters—that person was me, so I worked with Morgan for a year.

Q: Did you return to Popular after that year?

A. Yes, they offered to keep me, but Valls refused. I returned to Popular, supposedly to apply what I had learned about large loans to multinationals. However, the bank wanted to pursue something other than that kind of business, considering it too risky, so I couldn’t implement much of what I learned.

Q: You mentioned austerity as a hallmark of his management earlier.

A. That’s right. He was austere in his personal life and instilled that in the bank, considering it a defining trait. This meant strict cost control, which had both positive and negative aspects; taken to extremes, it risked impoverishing the bank technologically. However, he was mindful of this and approved significant investments in technology and new systems when necessary. It also meant salaries were lower than at competitors. Employees earned less at Popular, but we were proud—perhaps a bit arrogant—believing the bank we worked for was the best. That sense of belonging outweighed lower pay.

Q: Didn’t this lead to talent loss?

A. Relying almost exclusively on internal talent had that downside. On the other hand, it was motivating and fostered team cohesion. We all knew that someone starting as a clerk or messenger could rise to CEO, as with Ildefonso Ayala, one of the best. He retired in 1995 after 49 years at the bank.

Q: How did you join the bank?

A. I’m an aeronautical engineer, but job prospects were scarce after graduation. In 1968, I joined a consulting firm that was a Popular subsidiary, where we worked on macroeconomic studies, market research, and opinion analysis. I moved to Popular in 1975 to manage companies where the bank held stakes, sometimes to liquidate them, working in a team with a board member and a general manager. I then joined the boards of these companies and handled their sales. Later, I worked at Autopista Vasco-Aragonesa as Popular’s representative. After a sabbatical, I returned to organize Luis Valls’ secretariat during the 1982 Latin American debt crisis, managing syndicated operations and selling discounted loans. I then led the International Department and later handled real estate during the 1992 crisis. I headed Banco Popular Hipotecario, combining good and bad assets, in partnership with Germany’s Hypo Vereinsbank. I led the financial department from 1997 until becoming CEO for ten months 2008 during the financial crisis, then vice president. 2009, the Bank of Spain proposed that I be a member of the FROB’s governing committee. I stayed on Popular’s board until 2017.