Santander face listing delay in the UK

The planned flotation of Santander’s UK arm is set to be put back to at least 2013 because of uncertainty caused by bank ring-fencing, it was reported today.

The Spanish-owned bank’s initial hopes of raising £3bn (€3.4bn) through the sale of a 20% stake later this year have already been frustrated by market turbulence.

Now the Financial Times has said that the float is unlikely to happen until 2013 at the earliest after this week’s Vickers Report proposed that banks must ring-fence their retail arms from investment banking.

Even though Santander UK is a predominately a retail bank, between 5% and 10% of its assets would fall outside the definition of what can be included within a retail ring-fence, analysts have said.

Santander, which is the owner of the former Abbey, Alliance & Leicester and Bradford & Bingley building societies, is lobbying for these activities to be included within its retail businesses.

If it fails a listing could be more difficult and the bank might need to set up a separate holding company that would own the different parts of the business.