Santander Reportedly Considering Exit of UK Banking Market

Santander is reportedly rethinking its U.K. presence 20 years after entering the British banking market.

The Spanish lender is weighing a number of options, including exiting the U.K. entirely, the Financial Times (FT) reported Sunday (Jan. 19), citing sources familiar with the matter. These sources said no announcement was imminent and that the review was in its early stages.

The FT noted that this is happening as Santander is dealing with lower returns at its U.K. banks compared to other markets. The company is also facing exposure related to a British court ruling about the improper sales of car loans. Last year, Santander put aside £295 million ($359 million) to cover the potential costs of the ruling.

A spokesperson for the bank told PYMNTS that the U.K. “is a core market for Santander and that has not changed.”

One former executive told the FT that Santander UK — the company’s retail and commercial banking operations in Great Britain — has caused frustrations within the larger organization in recent years.

The former executive said that because of this frustration it had “always been a possibility” that Ana Botín, executive chair of Santander, would decide to sell the ringfenced bank. Two sources said it was not clear who would be interested in buying the unit.

Santander’s entry to the U.K. retail banking space came in 2004 when it purchased the former building society Abbey National.

Santander last year launched high-yield savings accounts via its digital bank in the U.S., with Botín saying the bank aims to have a full-service digital bank in the country by the end of 2025. As noted here at the time, Santander is also one of the few European lenders with a retail presence in the U.S., with 409 branches in the country, primarily in the Northeast.

In other banking news, PYMNTS spoke last week with Tammy Trilli, senior vice president of commercial payments First National Bank of Omaha (FNBO), about that 167-year-old bank’s entrance into the digital age via partnerships with other organizations.

She told PYMNTS that no matter the setting or the product being designed and launched, there’s one overarching principle.

“Being able to introduce a third party that we can stand by — where we can show up together — to deliver the experience that our customers expect,” Trilli said.

Research by PYMNTS Intelligence has found that two-thirds of banks have launched such collaborative efforts with FinTechs, with 75% of credit unions and banks saying that partnerships are necessary to meet customers’ expectations.