Banco Santander, Europe's second biggest banking group, is considering a partial flotation of its British businesses.

The move, which could value the operation at £15bn, would help to fund its attempt to buy Royal Bank of Scotland's Williams & Glyn's, which the latter has been ordered to sell by the EU as the payment for the injection of state cash it has received.

Santander's UK business includes Abbey, Alliance & Leicester and Bradford & Bingley's deposit businesses. It accounted for around half the new mortgages sold in Britain last year.

As well as funding a deal, a float would provide an injection of capital for Santander which would help to insulate it in the event of further disruption to the troubled Spanish economy\[Lucy Gollogly\], which is reeling from the effects of the property crash.

Santander's reliance on its Spanish heartland has fallen to 25 per cent as a result of its rapid international expansion of recent years. However, the company increased its bad loan provisions in 2009 by 43.7 per cent to €9.84bn (£8.6bn) as soured debt levels rose to 3.24 per cent at the end of the year from 2.04 per cent at the end of 2008.

A spokesman for the bank declined to comment on the possible flotation, whose £15bn valuation is based on 10 times its £1.5bn profits in the UK last year — a 20 per cent increase.

However, City sources said Santander had talked to investment banks about listing as much as 25 per cent of the UK operation, in a move similar to the partial flotation of Santander's Brazilian operations last year. That contributed €1.4bn (£1.2bn) to the bank's €8.9bn profit in 2009.

Williams & Glyn's, which has 300 branches, has attracted Santander's interest because of its presence in the business banking market.