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Report doubts over Santander plans

Moves by Spain's Santander to float its Abbey and Alliance & Leicester UK banking division are unlikely to take place this year and may be scrapped altogether, reports said.

The bank had been considering a possible autumn listing, but it is understood the move has been pushed back to the spring, or may even be ditched.

Aside from stock market volatility, the Sunday Times said the bank was unsure whether a UK listing would release enough capital to meet its financing needs.

Speculation about a flotation has mounted since Santander secured a deal with Royal Bank of Scotland to buy the 318 branches that RBS was forced to sell as a condition of state aid.

Santander has reportedly been working on the float plans with advisers from Deutsche Bank and Bank of America Merrill Lynch, However, a source told the newspaper that no final decision has been taken and that it was "highly unlikely" the listing will take place soon.

The UK business received £4.5 billion from its Spanish parent company in the summer and is under no immediate pressure to raise money.

Santander, which could sell 20% of the UK business in a £20 billion flotation, has an estimated 1.8 million British investors who own shares following the bank's acquisitions of Abbey in 2004 and Alliance & Leicester and parts of Bradford & Bingley during the height of the financial crisis.

The Mail on Sunday said a flotation could lead to investors being able to swap their shares in the Spanish parent company for a stake in the UK business. Santander is the second most widely held share by private investors after Lloyds Banking Group and by far the most widely held foreign company share.

The newspaper added that Santander was also planning to acquire 96 of the 265 Halifax agencies axed in the summer by Lloyds. It is also in consultation with a number of the 130 firms recently told by Nationwide Building Society that their agency agreement will be terminated at the end of this year.

Unlike a branch, an agency is run by non-bank staff and typically offers basic banking facilities. Most are run by estate agents or financial advisers.


From Belfast Telegraph