Santander to mirror Latin strategy with UK floatation?
Posted by Jon Wilcox in Industry Sectors on Mon, 08/02/2010 - 12:05
Reports suggest the Spanish bank could float its UK arm, reinforcing its bid for RBS branches in the process.
Santander, the Spanish back that acquired Abbey, Bradford & Bingley, and Alliance & Leicester, is preparing to float at least some of its UK arm on the stock exchange, according to reports.
If it goes ahead, a floatation could raise as much as £15 billion for Santander, which has increasingly expanded into the UK market in recent years. The bank floated its Brazilian arm in 2009, raising £9 billion in the process.
Reuters reports that analysts and industry observers “have been speculating about a potential initial public share offer for Santander's fast-growing UK arm since the euro zone's largest bank struck gold with the market debut of its Brazilian subsidiary last year.”
According to The Times, up to 25% of Santander’s UK arm could be floated, giving the Spanish back enough leverage to acquire the 300 plus branches of Royal Bank of Scotland currently up for sale.
Officially, Santander wishes to grow its UK arm organically, though it hasn’t ruled out further acquisitions in the future.
The bank is yet to comment on the reports.
The Bottom Line:If Mr Cable has his way...
"If Mr Cable had his way, all the big banks would be broken up and bonuses would be virtually eliminated - a sure-fire way in my view of guaranteeing an end to the UK’s ability to compete as an international financial centre. Let’s not forget that this is a man who is on record as saying that everyone who works in a bank has an ‘aristocratic lifestyle’ clearly demonstrating his lack of understanding of the sector." A tough line on bankers’ bonuses could make a brain drain of financial talent a distinct possibility, warns Paul Marsden. Read more