Santander rejected £11bn Natwest bid for UK business

Friday 09 Could 2025 5:14 pm

Santander rebuffed an £11bn bid for its UK retail banking division from Natwest earlier this 12 months as a result of it was was too low.

The 2 lenders are now not in negotiations, in keeping with folks familliar with the matter cited by the Monetary Occasions, regardless of constant hypothesis concerning the destiny of the Spanish monetary juggernaut’s UK enterprise.

Santander is within the throes of a significant overhaul that may see it double down on funding within the Americas over its legacy footprint in Europe. The strategic reset has sparked rumours it was planning to dump its underperforming UK operations to a different lender, which it has been compelled to disclaim on a number of events.

As a substitute, the financial institution has sought the permission of regulators to spin off its motor finance division, which is going through a near-£300m payout as a part of the continuing motor finance scandal, and introduced plans to shutter 95 branches.

Earlier this week, it additionally booked €7bn (£5.9bn) for the sale of a big stake of its Polish unit, a considerably remoted marketplace for the lender, to Austrian financial institution Erste. Santander is anticipated to funnel the proceeds from the sale into its new focus markets, assuaging any strain there might need been to dump different divisions.

The strategy from Natwest, which had it been accepted would have constituted the most important banking deal for the reason that monetary disaster, has emerged because the UK lender is poised to return to full personal possession

The federal government, which has owned a stake in what was beforehand Royal Financial institution of Scotland because it was partially nationalised in 2009, is anticipated to relinquish the final of its fairness within the banking group earlier than the summer time.

Members of the lender’s high brass have already hinted that when that occurs, the financial institution will turn into extra acquisitive, with the Santander strategy suggesting it already girding its loins for future dealmaking.

Talking at Natwest’s first quarter media name final week, chief government Paul Thwaite mentioned he was trying “throughout the market from an M&A perspective.

“As lots of you have got heard me say earlier than, it’s a excessive bar each financially and operationally,” he added. “It must be completely compelling from a shareholder perspective.”

A Santander spokeswoman mentioned: “As now we have mentioned, the UK just isn’t on the market and is a core a part of Santander’s diversified enterprise mannequin which is confirmed to ship enticing, sustainable returns over the long run.”