A recent report that Santander may exit the UK market compelled the bank’s Executive Chairman to throw cold water on the rumors.
Speaking at the WEF in Davos, Ana Botin told the audience they love the UK market, claiming it will remain a core market for the global bank.
The FT first revealed the report of a looming departure, which claimed the bank was dealing with “high costs, fairly low recent returns, and slow growth.”
While Botin sought to mitigate the rumblings, concern remains that Santander may bail on the UK market. Reuters wrote that the UK market is under review referencing an individual with knowledge of the issue. Scaling back operations is said to be one consideration.
Santander has been active in the Fintech sector, embracing change and the benefits of technology. Still, it operates around 444 physical branches, including around 20,000 employees around the country.
Douglas Grant, Group CEO of Manx Financial Group, worried about what it would mean if Santander left the market.
“Santander’s potential exit from the UK would deal a significant blow to competition within the banking sector, particularly in the mortgage market. For a government striving to ensure financial stability and address the housing shortage, such a move could prove highly detrimental. It’s no surprise, therefore, that the Chancellor is intervening on commission payments – a seemingly unrelated issue at first glance but one closely tied to maintaining trust and stability in the financial ecosystem.”
A possible exit does not necessarily mean shuttered branches and a reduction in services. A sale to a competitor could be in the works as well.
A different Reuters report claimed Barclay’s was a natural match and the “most logical home” for the big bank. Santander UK may come with a price tag of around £13.6 billion pounds.
The UK market has long been dominated by big banks – at least until the Fintechs arrived. Digital-only banks like Starling, Monzo, or Revolut have rattled establishment banks. Perhaps the fact the UK is ground zero for Fintech innovation, Santander is looking around the corner as to what this means for the brick and mortar crowd.