Santander revives £3bn flotation plan for UK arm to fund growth
SPANISH bank Santander is re-examining plans to list its UK operations to raise cash for the purchase of assets including 318 Royal Bank of Scotland branches, it is understood.
Depending on economic conditions, the group could float 20 per cent of the division comprising Abbey, Alliance & Leicester and parts of Bradford & Bingley in the autumn. Such a move would generate around £3bn to fund bolt-on growth.
The idea was first mooted in February after conversations between Santander and investment banks. The institution’s $7bn (£4.6bn) initial public offering (IPO) of part of its Brazilian subsidiary last year was taken as a model.
Economic conditions deteriorated in the second quarter due to market fears over the indebtedness of various periphery Eurozone countries. Santander is still said to be unsure as to whether the London stock market will be sufficiently buoyant to support a large flotation in the third quarter. It is lining up alternative means to finance expansion should investors continue to be fickle.
One route would be to use group-level retained profits to cover costs such as the £1.8bn RBS asset purchase, it is understood.