* Saenz was convicted of filing false complaints against debtors
* Spain's central bank was studying Saenz's fitness for banking
* Accounts show Saenz has accumulated pension rights of 88 mln euros
By Carlos Ruano and Sonya Dowsett
MADRID, April 29 (Reuters) - Alfredo Saenz, chief executive of the euro zone's biggest bank, Santander, stepped down on Monday ahead of a decision that could have banned him from banking because of a criminal conviction.
His departure spares the central bank from making a definitive call on whether Saenz should be declared unfit for banking, after a number of conflicting court rulings and changing government rules.
The regulator had been due to decide in the coming weeks.
Santander said in a statement that 70-year-old Saenz, who has worked closely with chairman Emilio Botin for 20 years, was stepping down voluntarily and thanked him for his work at the bank, which has quadrupled in size over that time.
Santander's board met on Monday and named Javier Marin, 46, as the bank's new chief executive. Marin, who runs the private banking operation, represents a new generation but is also a confidante of 78-year-old Botin.
Saenz was seen as a skilled retail banker, while Botin was the dealmaker. Together they transformed the bank from a regional lender to an international powerhouse.
Saenz was one of the few Santander executives that Botin would delegate to, according to a source who has worked with upper management at the bank, and the chairman had publicly defended the CEO and resisted pressure for him to step down.
A source with knowledge of the proceedings said Santander had a number of conversations with the central bank over Saenz and his successor. "Saenz's voluntary resignation is a non-traumatic close to this chapter," the source said.
"This is a very positive decision for banking stability and for Santander," a central bank source said.
Saenz was convicted in 2009 for making false accusations against debtors in 1994 when he headed Banesto bank, which is now part of Santander. Banesto had sued the debtors to recover debt and they countersued. A judge sentenced him to a brief time in jail, but that was suspended.
Santander did not say how much Saenz would be compensated on leaving the bank, but his accumulated pension rights are just over 88 million euros ($115 million), according to the bank's audited accounts.
The rich pension could fuel anger at bankers in Spain after a 40 billion euros public bailout of weak banks that saddled investors in those banks with almost total losses.
Santander's enormous international expansion over more than a decade has only somewhat shielded it from a financial and economic crisis in Spain, where the banking sector was crippled by the collapse of a housing bubble in 2008.
Flagging income in Brazil and a recession in Spain dragged down the bank's first quarter profit by 26 percent.
The bank's shares, which have lost 9 percent so far this year, rose 2.6 percent on Monday to 5.56 euros, outperforming the European bank sector index, which rose 0.99 percent.
"The change in CEO does not come as a surprise, given the legal pressure on him to resign, but the appointment of Javier Marin as new CEO is unexpected," said Francisco Riquel, analyst with N+1 brokerage in Madrid.
"That said, he has the youngest profile of the top management ... he has worked very closely with and has the full trust of Chairman Mr. Botin. In this context, we do not expect meaningful changes in the strategic guidelines of the bank."
Saenz joined Santander in 1994 when Spain's biggest bank acquired Banesto, the bank he headed.
After rising to the chief executive post in 2002, Saenz closed international branches, sold off industrial holdings and focused on Spanish retail banking to sculpt Banesto into the domestic arm of Santander, while the parent group expanded aggressively abroad.
During Saenz's tenure as chief executive, Santander grew in assets to 1.25 trillion euros from 358 billion, and in managed funds to 1.38 trillion euros from 453 billion.
He appealed his 2009 conviction and former Socialist Prime Minister Jose Luis Rodriguez Zapatero pardoned him in 2011.
The Supreme Court in February this year partially overturned the pardon, opening the door to the central bank's barring Saenz from banking on the grounds that the criminal conviction made him morally unfit.
The central government on April 12 passed new rules that gave the central bank wide discretion in deciding the issue. That seemed to give Saenz a reprieve - since a conviction was no longer an automatic trigger for being barred from banking - but the central bank then opened new proceedings in the matter.
Analysts and Santander watchers said the focus remains on who will succeed Botin. His daughter, Ana Patricia, who runs Santander's UK arm, is considered a likely candidate.
Mauro Guillen, professor at the Lauder Institute business school in Pennsylvania, who wrote a book about Santander, said: "This is not the big transition, the big transition will be when Emilio Botin stands down. The CEO is the second in command."
Santander's new CEO, Marin, joined the bank in 1991 and has served as executive vice president of global private banking and asset management and insurance at Santander since November 2009.
He shares a love of opera with Saenz, and golf with Botin.
Despite being under pressure to shed businesses and raise capital at a time of rising bad loans and defaults in Spain, Santander has shown interest in expanding in some areas, including possibly the private bank and asset management side that Marin is from.