News Column

Santander UK stock market flotation 'will not happen in 2014'

January 31, 2014

Jill Treanor,

Santander is awaiting clarity on capital rules and the structure of its business before it can push the button on a stock market flotation of its UK arm. The long-awaited listing of the UK business first mooted in 2010 has been deemed a medium-term prospect by the Spanish-based bank and is not expected to take place this year. "We will not do it in 2014 it is an operation for the medium term we will do it when the business has the appropriate value," Javier Marin , chief executive of Santander, was quoted as saying as the bank reported a near-doubling in profits to 4.3bn, helped by a reduction in its bad debt provisions. The UK arm, built through the acquisition of Abbey National, Alliance & Leicester and taking on the mortgages of Bradford & Bingley during the 2008 banking crisis, is in the process of hiring Nathan Bostock , finance director of Royal Bank of Scotland , to a top role. But under pressure from the Prudential Regulation Authority , Bostock will now be deputy chief executive and not take the additional chief risk officer title that he was initially offered to lure him from RBS. A Santander spokesman said: "We look forward to welcoming Nathan in his role as deputy chief executive." It is not clear when Bostock will take up the role. Earlier this week he had to explain to the City why RBS was taking a 3bn charge for legal and conduct issues, which is pushing RBS to an 8bn 2013 loss. The UK arm of Santander, run by Ana Botin , showed the benefits of high-profile advertising campaign led by Olympian Jessica Ennis-Hill and racing driver Jenson Button , which brought in an additional 1 million customers for its new current account. The bank said it was the main beneficiary of current account switching in 2013, when a new industry-wide switching system was introduced in September, taking an 11% share of all accounts moved, or 230,000 customers. But the bank said "in 2014 we await further clarity in respect of capital levels, leverage and the detail rules necessary to implement ringfencing". The ringfence between high street operations and investment banking businesses was recommended by the Independent Commission on Banking and its precise details are expected to be ironed out during the course of this year, with a view to implementation by 2019. Ana Botin told the Guardian that Santander was a challenger bank to the big four Lloyds Banking Group , RBS, HSBC and Barclays with a 5% share of current accounts and a 6% share of small business banking, where the bank is aiming to increase its presence after bolstering lending by 13% in 2013. Profits in the UK arm were flat at 1.1bn. "The UK economic recovery is strengthening, although uncertainties remain in the banking environment for the year ahead," she said. Santander has set a target for 20% of all its lending to be aimed at small businesses by 2015, hitting 12% or 22.1bn last year, up from 10%. One of the biggest players in the mortgage market, the bank's stock of home loans fell by 8.5bn after pulling back from riskier lending such as interest-only loans.

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Source: Guardian Web

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