Santander UK IPO could hit further delay

THE slated £5bn float of a fifth of Santander’s UK business might not get away until 2012, according to a person close to the IPO process.

“If the markets are not in the right condition, it’ll be 2012. There’s a figure in mind the bank wants to get,” said the source.

The prospect of putting back the float follows comments by the group’s chairman Emilio Botin, who yesterday pushed back expectations of a float to the second half of this year.

Former chief executive Antonio Horta-Osorio forecast last year that it would take place before the third quarter of 2011.

One analyst told City A.M. that the float could be put off “indefinitely” if market conditions for banks do not improve.

Industry values have been depressed by an impending onslaught of regulation that could increase banks’ costs and restrict their business models.

The uncertainty surrounding the float follows a fourth quarter earnings report dented by worsening non-performing loans, mostly in mortgages in Spain and Portugal, as well as a one-off liquidity requirement imposed by the Bank of Spain in the third quarter of 2010 that cost €472m (£401.5m).

Pre-tax profit for the group rose by a slim 2.4 per cent to €12.1bn but net profit was down 8.5 per cent. Despite a drag from the Eurozone, the bank earns 65 per cent of its profits outside continental Europe. Its shares closed 1.7 per cent lower at €8.99 yesterday.