View the article online at http://citywire.co.uk/money/article/a444748
Santander confirms London listing as UK profits rise
(Update) Santander will launch on the UK stockmarket next year, chief executive Alfredo Saenz said today, after the group reported rising UK profits set against a 9.8% decline at group level over the last nine months.
Santander will launch on the UK stockmarket next year, chief executive Alfredo Saenz said today, after the group reported rising UK profits set against a 9.8% decline at group level over the last nine months.
The Spanish banking giant, one of the biggest in the world, was hit by bad debt provisions imposed by the central bank in its home country.
But in the UK, where the bank recently announced it was adding 318 RBS branches to its growing portfolio of high street operations, profits rose by 12.8% to £1.3 billion. The bank reported a 7% increase in loans, and 13% rise in deposits in the UK.
Saenz used a conference call after the release of the numbers to put an end to months of speculation about a UK listing: 'The decision of listing in the UK has been taken. Another thing is the exact timing. It's obviously going to be in 2011, and probably in the first part of the year, but the exact date isn't clear,' he said, according to a report on Dow Jones.
It has been previously suggested that Santander would seek to raise some £3 billion from a London flotation, in order to fund its further expansion. The UK division took £4.5 billion from group subsidiary Banco santander to help it pay for its RBS acquisitions.
The UK accounts for 18% of Santander’s overall profit. It began its UK expansion in 2004 when it acquired Abbey. Then four years later it bought Alliance & Leicester as well as Bradford & Bingley’s savings and branch network. Once it has finished rebranding the Alliance & Leicester branches by the end of this year, there will be some 1,300 Santander branches and 4,500 cash machines in the UK.
António Horta-Osório, who heads up Santander's UK division, said: ‘Our efficient cost base gives us a competitive advantage and enables us to offer superior value-for-money propositions to our 25 million customers.’
However there has been widespread criticism that the group has delivered competitive rates at the expense of customer service.
The rapidly expanding group trumpeted three significant acquisitions in the third quarter, including the acquisition of the RBS branches. This has led to concerns about the speed of Santander’s expansion.
However Saenz reportedly dismissed the prospect of further expansion: "The work we have in front of us now is more about consolidating and integrating what we've already bought.'
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