Santander is reportedly considering leaving the UK due to red tape, a move that could affect tens of thousands of employees and around 14 million customers.
The Spanish banking giant is considering exiting the UK as part of a review of its future strategy, according to the Financial Times. If senior executives decide to leave, they will seek a buyer for the bank’s operations here.
The unusual proposal was said to have been sparked in part by frustration over costly rules introduced in Britain after the financial crisis, which have resulted in lower returns than in other markets.
The bank was also forced to set aside £295m to cover the potential costs of the car finance scandal after a court ruling shocked the financial industry last year.
Santander’s exit would be an embarrassing defeat for the government and its bid to provide greater stability to British business and overhaul regulation.
It comes after Rachel Reeves summoned the bosses of UK regulators earlier this week and told them they must help revive the UK’s sluggish economy “by tearing down regulatory barriers to economic growth”.
Senior executives at Santander have been unhappy for years that returns in the UK were lower than in other markets such as Spain, which was blamed on a higher cost base and so-called ring-fencing rules.
After the financial crisis, British regulators forced large banks to “quarantine” or separate their retail banking operations from other riskier investments and international activities.
The Financial Times reported that a former Santander executive said it was “always possible” for executive chairman Anna Botin to sell the beleaguered bank as a result.
Insiders say the bank’s top brass wants to focus more on growth regions such as the United States after its share price fell by a third in just a decade.
Under the plan, the group will exit retail and business banking in the UK while retaining some corporate and investment activities.
The bank’s size means its exit could have widespread ramifications. The company has around 20,000 employees, 444 branches across the UK and holds £200bn of customer loans.
Santander began retail banking in the UK in 2004 after acquiring the former building society Abbey National.
After the Great Recession, it also acquired parts of Alliance & Leicester and Bradford & Bingley, becoming one of the largest lenders in the United States.
Santander is already cutting jobs, saying late last year it would cut 1,400 jobs.
A Santander UK spokesman said: “The UK is a core market for Santander and this has not changed.”
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