Breakingviews | Santander

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08 Feb 2010 13:14

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Santander is considering a partial flotation of its UK operations, according to a person familiar with the situation.

When asked last week about a possible float, the Spanish bank's chairman, Emilio Botin, said "nothing is foreseen at present".

The group listed 14 percent of its Brazilian business, raising 4.8 billion euros, last year.

Santander built up its UK operations through the acquisition of high street brands Abbey and later Alliance & Leicester and Bradford & Bingley. The UK contributed 16 percent of Santander's earnings in 2009, up 55 percent on the previous year.

The group's shares have fallen 24.7 percent since reaching 12.1 euros on Jan. 11.

A float of the Spanish bank's UK business could raise capital to defend against mounting losses in its home market. If the economy recovers, the proceeds could fund deals. But low UK bank valuations and regulatory hurdles make this an uncertain way for Santander to boost capital.

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