Santander boss supports government's lending plan

City A.M. Reporter
The new head of Santander UK has told the Treasury Select Committee she intends to take part in the government's plan to boost business lending.

Ana Patricia Botin, who started as Santander's UK chief executive on December 1 after former boss Antonio Horta-Osorio was poached to run Lloyds Banking Group, said she remained in talks with the government over "Project Merlin", which aims to boost lending and cap pay for bankers.

Botin indicated that Santander would potentially take the lending target on alone rather than as part of a group target.

"We support the overall objectives of Merlin. Our intention is to participate specifically in the lending commitments ... in our own way," Botin said.

The Spanish bank may prefer to sign up for an individual lending target, rather than joining rivals with a group target.

Botin was speaking to the Parliamentary committee as part of a probe into industry competition. She said she did not support forcing banks to split investment banking from retail banks.

Shares in Santander rose four per cent this morning, outpacing a two per cent rise in the European index and shares in Banesto, majority owned by Santander, rose 3.9 per cent, showing investors were unperturbed by the report.

Jayne-Anne Gadhia, chief executive of Virgin Money, earlier told the committee she supported the separation of investment banking and retail banking to reduce risk-taking.

"It is an extreme solution, but we have seen extreme times," Gadhia said.