Santander pulls out of race for RBS fund
Santander has removed itself from the shortlisted lenders vying for a share of the £275 million incentivised switching scheme for SME customers established under the terms of Royal Bank of Scotland (RBS) bail out agreement.
The Spanish-based lender, which this week announced plans to close 140 of its UK branches, had been competing for a share of the cash to expand its small business banking division.
Despite being a strong contender to win one of the biggest chucks of the cash, Santander said its decision to take itself out of consideration was down to worries about the economy, Brexit and regulatory changes.
A spokesman for the bank said yesterday: “Following detailed analysis we have decided not to submit an application.” The reason for pulling back was the “pace and uncoordinated nature of the regulatory environment in the UK and the current economic and political uncertainty,” the spokesman added.
RBS has been ordered to hand over a total of £775 million in grants and incentives to its competitors to boost competition in business banking as a final penalty for its £45.5 billion bailout during the financial crisis a decade ago.
The largest pool of grants, of £120 million, £100 million and £60 million, have attracted the most intense competition and will be handed out in a month’s time by an independent committee led by Lord Cromwell, who was appointed by the Treasury to oversee the process.
Santander, which is based in Madrid, has built its presence in Britain through acquisitions of Abbey National, Alliance & Leicester and Bradford & Bingley.
It now holds about 5 per cent of the business banking market in the UK.
Glasgow-based Clydesdale Bank and Edinburgh-based Hampden & Co were named among eleven banks (including Santander) that were announced in December as among those in the running to receive a share of the fund.
Concerns had been raised at the time of the shortlist’s announcement after it showed that of the 11 organisations who have met the eligibility criteria for a share of the funds as only four are newcomers to the banking scene - Monzo, Starling, Metro Bank and Hampden & Co.
Arbuthnot Latham & Co, Co-operative Bank, Nationwide Building Society, and Svenska Handelsbanken, were named alongside other household names Clydesdale and TSB on the incumbent list, along with the now removed Santander.