Santander could be considering quitting the UK, people familiar with the matter have said in reports – such a decision would likely be a blow for Chancellor Rachel Reeves
Reports suggest that major bank Santander is considering exiting the UK market in a potential blow to Chancellor Rachel Reeves.
The bank has been in the UK since it purchased Abbey National in November 2004 and is a huge figure on the UK high street, but sources familiar with the matter said that a possible break from Britain is on the cards. A review into Santander UK by the bank is said to be considering a number of potential options, but is very much in its early stages and there are no concrete plans yet.
Sources said the bank is frustrated with lower returns at Santander UK, its independent board and high costs, as well as rules introduced following the 2008 financial crisis which may have led to lower returns than in other markets. So-called ‘ring-fencing’ came into effect after the crisis and requires major banks to separate retail banking from their investment and international banking activities.
Insiders also told the Financial Times that Santander may want to shift its focus towards the US. A former Santander executive was reported as saying that it has “always been a possibility” that Ana Botín, the bank’s executive chair, would choose to sell.
Santander currently employs around 21,000 people in the UK and has around 14 million customers. In October, it announced plans to cut around 1,400 in an effort to cut costs. The report in the FT also said that if Santander chose to move away from retail and commercial banking, it would still operate in corporate and investment banking.
“The UK is a core market for Santander and this has not changed,” Santander said. The Mirror has approached the bank and the Treasury for further comment. The Chancellor has urged regulators to “tear down” red tape in a bid for stronger economic growth. She and the Business Secretary met with bosses of watchdogs covering the railways, water, energy, and aviation sectors on Thursday.
Ms Reeves told the bosses that they must “tear down regulatory barriers” in an effort to support business investment and innovation to boost the UK’s growth prospects. Last month, the Prime Minister and other Government officials wrote to regulators asking them to each propose five reforms to support growth in the coming year. The Government said 17 regulators will be called in to have their proposals scrutinised over the coming weeks.
At Thursday’s meeting, the regulators highlighted that there are “some barriers, including the need to balance growth with their other legal responsibilities” in response to the calls from the Chancellor. The Treasury said the Chancellor found some proposals “promising”, but “wanted to see greater ambition and urgency to drive economic growth”.
Ms Reeves said: “There’s no substitute for growth. “Every regulator, no matter what sector, has a part to play by tearing down the regulatory barriers that hold back growth. I want to see this mission woven into the very fabric of our regulators through a cultural shift from excessively focusing on risk to helping drive growth.”
The Chancellor has faced criticism after Labour put growth at the centre of its economic policy. She insisted this week that she is “here for the long haul” in a fightback following criticism of her response to financial market turbulence. The Prime Minister, meanwhile, suggested critics should stop being hung up on “every single decimal point on a daily basis” and rejected the idea that her future as chancellor depended on short-term data.
Indicators of the health of the economy have since provided Ms Reeves with some relief, with inflation falling unexpectedly and a return to growth, although this was weaker than expected at 0.1%. This followed marginal declines in the two previous months.
