Santander planning cull of senior staff in Britain, report says

Britain's fifth largest lender is planning to cut the number of senior staff in a bid to cut costs and bolster profit margins, according to UK newspaper reports.

The lay-offs at Santander UK were expected to be made over the "coming months" and are an extension of a similar drive by the lender's parent in Madrid, the Sunday Times reported, citing City sources.

However, according to insiders, staff at Santander UK's branch network would be spared.

The cuts are part of Santander Group boss Ana Botin's plans to achieve €3bn in cost savings by 2018, while investing further in its digital operations.

On 31 March, Santander Spain told staff it would eliminate 450 smaller branches in that market, which later reports said might lead to approximately 1,000 redundancies.

At the time, Santander Spain chief Jose Antonio Alvarez cited the critical need to keep up-to-pace with the digital revolution in financial services as the main reason behind the restructuring of its branch network in the country, together with weak loan demand, an increased regulatory burden and the need to continue investing in technology upgrades.

In his letter to staff, Alvarez cited how some financial costs which had previously been assigned to the global corporate headquarters had been assigned to other countries.

"There has been exponential growth in FinTech investments in the past decade with a majority of the capital deployed in the Personal & SME retail space. Only about 1% of US and European consumer banking revenues having migrated to
new digital business model but this number is quickly rising, putting both regions at the tipping point for digital disruption," Citi analysts said in a research note sent to clients on 31 March.

To take note of, for some time now there have been analysts in the City talking of the medium-to-longer term competitive threat posed to even the UK's largest lenders not by the so-called 'challenger' banks but rather the tech-giants such as Apple, Google or Facebook.