Spanish bank Santander is making its presence known on the UK high streets. RBS is close to the sale of 318 of its branches, enabling Santander to overtake HSBC as the overall branch lender in number of branches. There are also rumors of Santander’s British arm to possibly be spun off. Santander has posted a 10 per cent increase in H1 profit.
The biggest bank of the eurozone is in negotiation to purchase 318 UK branches from RBS for approximately 1.8 billion pounds, some local resources have said. The deal could be finalized by Aug 6 of this year.
By EU regulators orders, RBS had to sell the branches in order to return the state aid of up to 54 billion pounds that was provided by the government as part of its bailout. RBS was one of many banks which were bailed out by the government.
The deal is expected to be final next year, and that is when the exact price of the sale should be made public. The new branches added to Santander Bank will boost their share in small business banking from 3 per cent to 8 per cent.
In addition to the UK acquisition, Santander Bank has preliminarily agreed to a purchase of 4.3 billion of car loans from HSBC, which are part of the UK bank’s eventual shut down of its in-trouble American consumer financial arm.
In other Santander business, sources have also said, Santander was thinking about listing its UK operations, following the success of its Brazilian business spin off from last year. They have estimated by selling a 20 per cent stake, they could raise 2 to 3 billion pounds. This could be possible by as early as this autumn.
After Santander bought Abbey six years ago, its numbers quickly boosted up to over 1,300 branches strong. Buying Abbey, along with taking advantage of some fruitful deals during the financial crisis, helped raise its gross mortgage lending by 14 per cent in the first half of the year compared with a year ago. That equaled market share of 19 per cent, which represents an increase of about 14 per cent.