Employees at Santander UK are braced for a new wave of redundancies, following a 38% drop in full-year profits and the bank’s decision to press ahead with cost-cutting measures.
The British division was one of only two units within Madrid-based Banco Santander to report lower profits last year, partly due to a £295m provision for the motor finance commission scandal, which hit the bank in November.
The bank’s focus on “simplification and automation” is expected to drive further headcount reductions in 2025. Santander quietly began cutting jobs in its UK business throughout 2024, surpassing original targets by shedding 1,800 roles, reducing its British workforce from 19,800 to 18,000. It remains unclear whether fresh cuts will match those levels this year.
Santander’s top brass in Madrid have reportedly voiced concerns over regulatory hurdles and rising costs in the UK, fuelling speculation that the bank might seek a buyer for its British arm. Executive chair Ana Botín has publicly dismissed rumours of a sale, insisting the UK remains a “core market”, but those denials were overshadowed by the sudden resignation of UK chair William Vereker.
At the centre of Santander’s difficulties is the looming motor finance commission scandal, which could cost an estimated £44bn across several banks, including Lloyds and Close Brothers, if not overturned by the supreme court in April. The scandal involves undisclosed “secret” commissions paid to car dealers, a legal development that has unnerved investors and risked overshadowing the bank’s recent pledges to slim down its UK operations.
The crisis has added to Madrid’s frustrations with Britain’s ring-fencing regulations, which require major banks to shield consumer deposits from investment banking activities. While regulators have indicated they may relax some of these rules, any changes would mainly benefit smaller lenders with fewer deposits, leaving Santander UK still grappling with stringent oversight.
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Santander UK staff brace for fresh job cuts after profits tumble 38%