Major banking giant Santander wants to leave Britain due to excessive red tape – a decision that would affect millions of customers and tens of thousands of employees.
The Spanish banking company is reportedly considering withdrawing from Britain while it assesses its future business dealings.
According to the Financial Times, the possible exit from the British Isles is believed to be due to frustrations with British rules introduced after the 2008 financial crisis, which have led to lower returns for the bank than in other markets.
After the crisis, major banks had to separate their retail banking from riskier investments and international activities, which the banking giant says has led to lower returns than in other markets such as Spain.
The Financial Times reported that a former Santander executive said it was “always a possibility” that chairman, Ana Botín, would sell as a result.
Insiders say managers are looking to shift their focus to growth regions such as the US after share prices fell by a third in just over a decade.
Under the plans, the bank would withdraw from retail and commercial banking in Britain, but retain some investment and business interests.
There There are around 14 million Santander customers who could be affected if the alleged schemes go ahead, in addition to around 20,000 employees across 444 branches across the UK. It also holds around £200bn of customer loans.
Under the plans, the bank would withdraw from retail and commercial banking in Britain, but would retain some investment and business interests (photo – City of London)
Chancellor Rachel Reeves told UK regulators bosses to revive the UK economy (pictured in the House of Commons on January 14)
The Spanish banking company is reportedly considering withdrawing from Britain while it assesses its future business dealings
It comes after Chancellor Rachel Reeves told UK regulator bosses to revive the UK economy by 'tearing down the regulatory barriers holding back growth'.
Last year, Ms Reeves pledged to cut red tape for the City of London after claiming regulations had “gone too far” following the 2008 financial crisis.
In her first Mansion House speech last November, she said: 'While it was right that successive governments introduced regulatory changes following the global financial crisis, to ensure that regulation kept pace with the global economy of the time, it is important that we learn the lessons of the past.
“These changes have resulted in a system that sought to eliminate risk-taking. That has gone too far and has had unintended consequences in some places that we now need to address.”
Ms Reeves has said she will “modernise” the Financial Ombudsman Service, which handles complaints between consumers and businesses, as part of the shake-up.
Meanwhile, a pilot project will be launched to deliver 'digital gilts' (tokenized government bonds issued on a blockchain) in a bid to better embrace technology.
The government will also consult on replacing the certification regime, which aims to strengthen market integrity and applies to staff below senior management level, with a more 'proportionate' approach that reduces costs so businesses can 'focus on growth' , the Ministry of Finance said.
Ms Reeves has committed the Government to publishing the first-ever Growth and Competitiveness Strategy for Financial Services in the spring, which aims to provide long-term certainty for the sector.
Prime Minister Sir Keir Starmer promised in October last year to root out the bureaucracy blocking investment in Britain (pictured with Rachel Reeves)
A former Santander director said it was 'always a possibility' that chairman Ana Botín would sell as a result
She has proposed focusing on five priority areas in financial services to capitalize on Britain's existing strengths and increase growth potential, including financial technology, sustainable finance, asset management and wholesale services, insurance and reinsurance and capital markets.
It comes after Prime Minister Sir Keir Starmer vowed last October to 'rip out' the bureaucracy blocking investment in Britain.
He pledged to end red tape that is holding back housing and infrastructure development, adding that he will “do everything in my power to stimulate growth.”
He told investors and CEOs at the International Investment Summit: “We need to look at regulations where they are unnecessarily holding back investment to move our country forward.
“Wherever it stops us from building houses, data centres, warehouses, network connectors, roads and railways, you name it, mark my words – we will get rid of it.
“We will remove the bureaucracy that blocks investment and we will ensure that every regulator in this country takes growth as seriously as this chamber does.”
Meanwhile, more than 100 banks are set to close this year in another blow to Britain's high streets.
Lloyds Bank has 51 branches set to close this year, while Halifax will close the doors to 46 of its stores.
Seven TSB branches will close, while sixteen Bank of Scotland branches will also disappear.
The closures began this month and will last through September.
Banks and building societies have closed 6,214 branches since January 2005, according to Which? data – the equivalent of 53 per month.
A spokesperson for Santander UK told the Telegraph: 'The UK is a core market for Santander and this has not changed.'
