Mike Regnier, the head of Santander UK, has expressed reservations about further investment in the UK, citing the country’s high tax burden and increasing costs associated with compensating victims of fraud.
In a session with the Commons Treasury select committee, Regnier highlighted the challenges faced by the bank’s UK operations, suggesting that allocating additional capital to the UK might not yield the returns expected by shareholders of Banco Santander, its parent group.
Regnier emphasized that Banco Santander regularly evaluates its investment decisions across its global operations and faces tough choices regarding where to allocate capital effectively. Despite being the UK’s fifth-largest lender, Santander UK encounters obstacles that diminish its potential returns, making it less attractive for capital deployment compared to other regions such as Brazil, Mexico, or the US.
One major concern highlighted by Regnier is the comparatively higher tax rates in the UK, which pose a challenge when competing for internal capital within the Santander group. Additionally, he noted that the UK banking sector bears the full cost of fraud, a burden not shared by banks in other jurisdictions.
While Ana Botín, the executive chairwoman of Banco Santander, has previously affirmed the importance of the UK arm within the group, stating it as a critical part of their strategy, Regnier’s remarks underscore the complexities and challenges faced by Santander UK in delivering competitive returns to shareholders amidst regulatory and operational hurdles.
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Santander UK Chief Voices Concerns Over Investing in the UK