SANTANDER’S UK chief executive António Horta-Osório yesterday defended the competitive nature of Britain’s retail banking market, even as his peers warned that regulation may lead to a wave of consolidation in the market.
Horta-Osório told the CBI conference that UK retail banking is currently “highly competitive and presents low barriers to entry”, positioning himself at odds with the government, which has appointed the Independent Commission on Banking to investigate how to inject more competition into the market, among other issues.
Santander’s UK chief, who has overseen his bank’s acquisition of Abbey, Alliance & Leicester and Bradford & Bingley since the dark days of the crisis, said the success of those deals was testament to the competitive nature of the market.
He said UK retail banking is more open than the market in other countries due to customers’ prevalent use of internet banking facilities, Britain’s large army of independent financial advisers and the fact that customer loans and services turn over much more quickly in the UK than the rest of Europe, meaning that new business is more important to banks.
Horta-Osório added that the SME lending market has also become more competitive since the financial crisis, as companies increasingly look to build relationships with more than one banking group in order to mitigate risk.