LONDON: Banco Santander is reviewing its presence in Britain, a person familiar with the matter says, two decades after its acquisition of Abbey National made it a major player on the country’s high streets.
Santander’s review is part of a regular assessment of its major businesses, the person said speaking on condition of anonymity because they were not authorised to speak publicly.
This could result in different outcomes, including scaling back Santander’s business in Britain, the person added.
“Britain is a core market for Santander and this has not changed,” Santander said in a statement last Sunday.
Santander competes with banks including Lloyds Banking Group and Barclays in Britain, which is one of 10 markets the Spanish bank considers key, including Mexico, Brazil and its home market in Spain.
Barclays had approached Santander about a possible offer for its British business but it did not lead to anything, the person and a second person said.
The approach last year did not proceed because of a disagreement on price, the second person said.
Reuters could not immediately determine whether Barclays was still interested in the business. Barclays declined to comment
Santander is exploring a number of strategic options, one of which is exiting the British market to focus on bigger growth regions such as the United States, the Financial Times (FT) reported last Saturday, adding that no deal or announcement was imminent and that the review was at an early stage.
Two people familiar with the matter told the FT it was unclear who would be interested in buying the unit, and that Santander could yet decide to keep the business, the FT added.
The Spanish lender is exploring a range of options, including keeping the business, and no deal is imminent, people with knowledge of the matter told the newspaper. Santander is also dealing with the effect of a British court ruling on car loans, the FT said.
The bank could also opt to increase its presence in Britain, the person familiar with the matter told Reuters.
The review comes as Santander set aside £295mil or about US$358.81mil to cover possible costs related to an industry-wide probe into motor finance commissions.
Santander also reduced its workforce in Britain through a round of 1,400 job cuts in October.
Major financial-trade bodies, including UK Finance, have long-standing concerns about the higher costs of business borne by banks in Britain compared to international rivals, particularly when in tax, compliance and fraud reimbursement.
Santander executives have also expressed frustrations about doing business in Britain.
In a parliamentary evidence session last March, Santander Britain chief executive Mike Regnier told lawmakers his unit had to lobby internally for the allocation of capital within the group – a task made more challenging by the competitive nature of the market in Britain and its idiosyncratic tax treatment of banks.
Santander in recent years has trimmed the relative size of the British business: Risk-weighted assets in Britain have been falling from around 14.7% of the group’s total in 2018 to around 12.7%. in the first half of 2024. — Reuters
