Santander is considering pulling out of the UK market, potentially leaving 14 million customers facing uncertainty over their banking future.
The Spanish banking giant is exploring several strategic options, including a complete exit from Britain, the Financial Times reported on Saturday.
The review comes two decades after Santander first established itself as a major player on UK high streets through its acquisition of Abbey National.
Sources familiar with the matter indicated the review is at an early stage, with no imminent deal or announcement expected.
Santander could quit the UK High Street
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The bank is reportedly examining the exit as it seeks to focus on regions with higher growth potential, such as the United States. Santander’s potential departure would have significant implications for its extensive UK operations.
The bank currently employs approximately 20,000 people across Britain and operates 444 branches nationwide. With £200billion in customer lending, it ranks among Britain’s largest lenders.
A former Santander executive has warned that a UK exit has “always been a possibility,” particularly under the leadership of executive chair Ana Botín.
The bank’s presence in Britain has grown substantially since its initial entry, with subsequent acquisitions of Alliance & Leicester and parts of Bradford & Bingley cementing its position as a leading retail bank.
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The bank acquired Alliance and Leicester Building Society
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Recent developments have signalled potential scaling back of Santander’s UK operations. The bank set aside £295million to cover possible costs related to an industry-wide probe into motor finance commissions.
In October 2024, Santander reduced its workforce through a round of 1,400 job cuts across its UK business.
The bank’s UK arm reported a significant profit decline in its third quarter, primarily due to the car finance commission hit.
Sources told the Financial Times it remains unclear who would be interested in buying the UK unit, and Santander could still decide to maintain its presence in Britain.
A pair of Bradford and Bingley and Abbey Bank signs
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Santander’s reported frustrations stem from several regulatory challenges in the UK market. The bank has expressed concerns over costly regulations introduced after the 2008 financial crisis, including ringfencing rules.
These rules require large banks to separate their retail banking operations from riskier investment activities, driving up costs and reducing profitability.
The bank’s leadership appears to favour prioritising growth markets like the United States, where returns are more attractive.
Despite these concerns, Santander maintains its commitment to Britain, with a spokesman stating: “The UK is a core market for Santander, and this has not changed.”