Santander to shed 1,900 UK jobs

Santander has three businesses in Britain

Spanish bank Santander has said it will cut 1,900 jobs in its three UK businesses - Abbey, Alliance & Leicester and Bradford & Bingley.

The bank said that the jobs would be cut in 2009 to reduce costs and did not rule out compulsory redundancies.

Unions reacted with dismay to the announced cut, which represents 8% of Santander's British workforce.

Santander is one of eurozone's largest banks by market capitalisation and second-biggest in the world after HSBC.

Consolidation

"Today's announcement shows we are on track to fulfil the commitment we made at the time of the Alliance & Leicester acquisition to grow our UK business whilst ensuring we meet our cost-saving targets," said Antonio Horta-Osorio, chief executive of the combined UK business.

SANTANDER IN UK

2004: buys Abbey National for �8bn

2008: acquires Alliance & Leicester in a �1.3bn deal

2008: takes control of 197 Bradford & Bingley's branches for �612m

The bank said it did not plan to close major sites in the UK, but it might consolidate some smaller offices into larger sites.

Santander plans to save �180m ($270m) by the end of 2011.

"Santander has confirmed that the biggest sites at Carlton Park and Bootle are not at risk, and that the branch network size is to be maintained," said Andy Kerr, deputy general secretary of the Communication Workers Union.

"While this will provide welcome reassurance for many of our members, the suggestion that smaller sites may be consolidated into larger ones raises serious questions over some locations around the UK," he added.

UK expansion

Santander gained foothold in the UK banking market in 2004, after buying Abbey for about �8bn, in Europe's biggest cross-border bank takeover.

The deal offered Santander control of Britain's second-largest mortgage lender, with 741 branches and 18 million customers.

The Spanish bank saw further expansion opportunities in 2008, as some UK banks were severely threatened by the global financial crisis.

It bought Alliance & Leicester in a �1.3bn deal aimed at reducing funding pressures on the UK bank and strengthening Santander's local business.

In September, the UK's biggest lender to landlords, Bradford & Bingley, was taken over by the government after the credit crisis had shut off its funding.

Santander stepped in and paid �612m to take control of 197 Bradford & Bingley's branches and �20bn in deposits.