Santander Considers Minority Stake Sale to Bolster British Arm

Santander, the Spanish banking group, is reportedly considering selling a 25% minority stake in its British arm to raise capital. This move would come as the bank seeks to bolster its position in Britain by acquiring 300 branches from Royal Bank of Scotland, a deal aimed at easing European competition authorities. The sale of a minority stake would also help Santander weather potential losses from its exposure to the struggling Spanish economy. Santander's British arm has grown rapidly since its 2004 acquisition of Abbey, and now boasts 25 million customers and 1,300 branches, making it Britain's second-largest mortgage lender and third-largest savings provider.

Key Takeaways:

• Santander is considering selling a 25% minority stake in its British arm to raise capital.
• The sale would help the bank acquire 300 branches from Royal Bank of Scotland to ease European competition authorities.
• Santander's exposure to the struggling Spanish economy may lead to losses, which the sale of a minority stake could help mitigate.
• The bank's British arm has 25 million customers and 1,300 branches, making it Britain's second-largest mortgage lender and third-largest savings provider.
• Santander has announced plans to take on high street rivals by offering market-leading products and cross-selling to existing customers.
• The bank has launched a fee-free Zero current account and opened 1.1 million new bank accounts last year, above its target.

Statistics:

• Santander's British arm posted a 30% rise in annual profits to £1.54bn in the year to December 31.
• The bank expects to complete the rebranding of Alliance & Leicester later this year.
• Santander bought Bradford & Bingley's 197 branches and 141 agencies, plus its £20bn savings book, for £612m in October 2008.
• The B&B brand was erased from the high street last month, ending its 150-year presence.
• Santander has 25 million customers in Britain.
• The bank has 1,300 branches in Britain.

Sources:

• "Santander weighs sale of UK unit stake" by Iain Withers, Globe and Mail, (no date provided)