Santander UK reassures worried customers as credit rating cut
Santander UK has reassured its Northern Ireland customers that they have “absolutely nothing to be concerned about” following the decision by a major ratings agency to downgrade the Spanish-owned bank’s credit rating.
The bank said that there would be no impact on its business here after the downgrade of it and 15 other Spanish banks by Moody’s, because the UK arm is an autonomous subsidiary.
Santander UK was lowered by Moody’s to an A2 rating — one notch above its Spanish parent.
Head of Santander UK’s retail bank Steve Pateman said in statement: “Customers of Santander UK have absolutely nothing to be concerned about.
“We operate separately from Spain and we are financially one of the strongest banks in Britain.”
Moody’s said it downgraded the Spanish banks because of the reduced capability of the government there to support the sector.
But UK regulation means there’s little chance that savers here will feel the impact of the Spanish downgrade.
“We are fully covered by the Financial Services Authority (FSA) and the Financial Services Compensation Scheme (FSCS) and all savings and deposits are guaranteed.
“Our credit rating is the same as Ulster Bank parent Royal Bank of Scotland and Lloyds. There is no difference with other companies.”
A spokesman for The British Bankers Association said throughout the global crisis, and even before 2007, British banking customers have not lost out on any of their savings, but claimed there is a lot of competition.
“The FSCS is in place and savings up to £85,000 are 100% protected.
“There is a lot of competition in the banking system. Banks are there to protect money and make money from lending it,” the spokesman added.
“The market rates will stay as low as the market can stand,” he said.
But the growing crisis in Europe, particularly in Greece, is expected to push borrowing costs up eventually.
Economist John Simpson said Northern Ireland and UK customers will feel the pinch with interest rates for borrowing eventually rising.
He said: “This is fine at the time for customers in Spain, they will pay more for their borrowing.
“Across Europe interest rates for borrowing money will edge upwards.
“Interest rates will tend to go up.
“This is not Santander’s fault, they are just part of the crowd.”
Worries over the health of Spanish banks sent Santander’s shares lower early yesterday but confidence returned in the afternoon and the stock ended up nearly 3% on the day.
The UK arm of Santander is one of the UK’s leading financial services providers. Having taken over Abbey National, Alliance & Leicester, Bradford & Bingley and RBS, it renamed itself Santander in January 2010.