Emilio Botin, one of Spain's most powerful men who transformed Santander (SAN.MC) from a small domestic lender into the euro zone's biggest bank, has died of a heart attack, aged 79.
Sources familiar with the matter said his eldest daughter Ana Botin, currently head of Santander's British business, was expected to be approved as the bank's new chairman at a board meeting later on Wednesday.
Such a move could spark controversy, with banking dynasties coming under criticism after a scandal at Portugal's Banco Espirito Santo BES.L, where the founding family's holdings are being investigated over financial irregularities.
"Succession shouldn't just be saying 'my daughter's going to take over'," said a corporate governance expert at a global asset manager which owns Santander shares, speaking on condition of anonymity.
But others said Ana Botin, who has spent most of the last 25 years at Santander, could provide welcome continuity.
"The key issue is whether or not family control is a good or a bad thing. Ultimately this depends on individuals and his (Botin's) daughter is a chip off the old block," said Philip Saunders, co-head of multi-asset at Investec Asset Management.
"More often than not, family control or strong influence tends to bolster long termism which is particularly important in a banking context given that banks typically behave in an overly pro cyclical manner and destroy shareholder value as a consequence," he said.
If Ana Botin is confirmed as group chairman, it will leave a gap at Santander's UK arm just as it prepares for a separate listing. UK Finance Director Nathan Bostock has been lined up as her replacement, but he only joined a month ago. The UK arm is also looking for a new chairman.