Spanish-based business bank account Santander has been hinting towards listing its UK operations but lacks any plans to definitively do so, say industry insiders recently.
One anonymous source did say that the Euro Zone’s largest bank determined by market value was indeed considering the option but has not made any commitments to such a plan.
The Financial Times reported that Banco Santander SA was indeed preparing to list its UK operations on the London stock exchange as early as this fall, a deal which could possibly raise an estimated £3 billion pounds if successful.
Sources also reported that the bank was considering selling a minority share of the UK arm of its operations in order to finance its £1.5 billion deal to purchase several hundred RBS branches in February.
The FT reported that Santander was considering floating 20 per cent of its UK operations if the conditions of the market were favourable. Officials at Santander’s headquarters in Spain declined an opportunity to comment on the rumours that it would be enabling investors to buy shares of its UK branches.
The UK division of Santander, built up through its acquisition of UK banking institutions such as Alliance & Leicester and Abbey, comprises approximately 16 per cent of the banking group’s profits. It is estimated to be worth in excess of £10 billion.
Bruce Packard, a brokerage analyst at Seymour Pierce, commented that while an offering of shares by Santander might be an attractive investment, the current worldwide economic climate means that carrying out such a deal might be difficult at best.
Because the level of scepticism in London is palpably higher than it is in Madrid, the attractiveness of any bank offering that Santander makes will be diminished, added Packard. He was quick to comment on the positive aspects of such an offering, however, citing the deposits the bank acquired from Bradford & Bingley enable it to rely on funding from wholesale markets much less.
In related news, Santander has been in conversation with U.S. bank M&T in regards of a possible merger overseas.