High street banking giant Santander is looking ‘to quit Britain over excessive red tape’ – a decision which would hit millions of customers and tens of thousands of staff.
The Spanish banking firm is reportedly considering pulling away from the UK as it assesses its future business transactions.
According to the Financial Times, it is thought the potential departure from the British Isles is down to frustrations over UK rules introduced after the 2008 financial crisis, which has led to lower returns for the bank than in other markets.
After the crisis, large banks were required to separate their retail banking from riskier investments and international activities, which the banking giant believes has resulted in lower returns than in other markets, such as Spain.
The Financial Times reported that a former Santander executive said it had ‘always been a possibility’ that executive chair, Ana Botín, would sell up as a result.
Insiders say executives want to shift their focus on growth regions like the US after share prices fell by a third in just over 10 years.
Under the plans, the bank would step back from retail and commercial banking in the UK, but would retain some investment and corporate interests.
There are some 14 million Santander customers who could be impacted if the alleged plans go ahead, in addition to around 20,000 employees across 444 branches in the UK. It also holds around £200bn in customer lending.
Under the plans, the bank would step back from retail and commercial banking in the UK, but would retain some investment and corporate interests (Pictured – City of London)
Chancellor Rachel Reeves told the bosses of Britain’s regulators to help revive the UK economy (Pictured in the House of Commons on January 14)
The Spanish banking firm is reportedly considering pulling away from the UK as it assesses its future business transactions
It comes after Chancellor Rachel Reeves told the bosses of Britain’s regulators to help revive the UK economy by ‘tearing down the regulatory barriers that hold back growth’.
Last year, Ms Reeves vowed to tear up red tape for the City of London after claiming regulation after the 2008 financial crash had ‘gone too far’.
In her first Mansion House speech last November, she said: ‘While it was right that successive governments made regulatory changes after the global financial crisis, to ensure that regulation kept pace with the global economy of the time, it is important that we learn the lessons of the past.
‘These changes have resulted in a system which sought to eliminate risk taking. That has gone too far and, in places, it has had unintended consequences which we must now address.’
Ms Reeves has said she will ‘modernise’ the Financial Ombudsman Service, which deals with complaints between consumers and firms, as part of the shakeup.
Meanwhile, a pilot scheme will be launched to deliver ‘digital gilts’ – tokenised Government bonds that are issued on a blockchain – in a move to better embrace technology.
The Government will also consult on replacing the certification regime, which seeks to strengthen market integrity and applies to staff below senior management level, with a more ‘proportionate’ approach that cuts costs so firms can ‘focus on growth, the Treasury said.
Ms Reeves has committed the Government to publishing the first ever Financial Services Growth and Competitiveness Strategy in the spring, which is aimed at providing long-term certainty for the sector.
rime Minister Sir Keir Starmer pledged to ‘rip out’ the bureaucracy that blocks investment in Britain in October last year (pictured with Rachel Reeves)
A former Santander executive said it had ‘always been a possibility’ that executive chair, Ana Botín, would sell up as a result
She has proposed focusing on five priority areas in financial services to take advantage of the UK’s existing strengths and boost the potential for growth, including financial technology, sustainable finance, asset management and wholesale services, insurance and reinsurance and capital markets.
It comes after Prime Minister Sir Keir Starmer pledged to ‘rip out’ the bureaucracy that blocks investment in Britain in October last year.
He promised to axe the red tape holding back the development of homes and infrastructure, adding that he will do ‘everything in my power to galvanise growth’.
He told investors and CEOs at the International Investment Summit: ‘We’ve got to look at regulation where it is needlessly holding back the investment to take our country forward.
‘Where it is stopping us building the homes, the data centres, warehouses, grid connectors, roads, trainlines, you name it then mark my words – we will get rid of it.
‘We will rip out the bureaucracy that blocks investment and we will make sure that every regulator in this country take growth as seriously as this room does.’
Meanwhile, more than 100 banks are set to close this year in another blow for UK high streets.
Lloyds Bank has 51 branches which are due to shut this year, while Halifax will close the doors to 46 of its stores.
Seven of TSB’s branches will shut, while 16 Bank of Scotland sites are also set to go.
The closures began this month and will happen all the way through to September.
Banks and Building societies have closed 6,214 branches since January 2005, according to Which? data – the equivalent of 53 a month.
A spokesman for Santander UK told the Telegraph: ‘The UK is a core market for Santander and this has not changed’.
