Santander had hoped to raise 20 billion pounds through a flotation of its UK arm. It’s Abbey and Alliance and Leicester UK banking divisions would be part of the float. It was due to sell the 20 to 25 per cent of its business in the fall but now that looks unlikely. However it’s been rumored that due to the uncertainty in the present economy the flotation has been postponed to 2011 at the earliest if at all.
This is disappointing news to the City as a successful IPO in London trading was anticipated and could have inspired others to go the same route. Santander was a favorable IPO after it was announced that they had won the bid for Royal Bank of Scotland’s 318 branches which were sold off because of the European competition rules.
The bank has been working on the flotation plans with Bank of America Merrill Lynch and Credit Suisse. At one time or another they have also consulted with a Deutsche Bank, Nomura and a few others.
Santander recently agreed to buy a majority stake in Zachodni, a Polish Bank for $4.2 billion. To fund its continued growth Santander needs a flotation as there are few other ways to obtain funding. It is also reported that Santander had plans to acquire 96 of 265 Halifax agencies being cut by Lloyds. Consideration is also high for them to purchase a number of the firms being released by Nationwide Building Society.
With the amount of growth that could be a part of Santander’s near future, perhaps the much needed flotation for the bank and the London Stock Exchange will in fact be put back on track. That would be good news for an end of year that has very few optimistic reports due to come out about the UK economy.