Santander to cut 1,900 banking jobs in Britain

12th December 2008, Comments 0 comments

The job losses which will affect Abbey, Alliance and Leicester, and Bradford and Bingley would be voluntary, says the Communication Workers Union.

LONDON – Europe's second biggest bank Santander will slash 1,900 jobs at its three British subsidiaries next year, the Spanish group said on Friday as it seeks to implement planned cost cuts.

The losses, which amount to about eight percent of Santander's British workforce, will affect lenders Abbey, Alliance and Leicester, and Bradford and Bingley.

Santander acquired the latter two banks earlier this year as the credit crunch takes its toll on British lenders.

"Today's announcement shows we are on track to fulfil the commitment we made at the time of the Alliance and Leicester acquisition to grow our UK business whilst ensuring we meet our cost-saving targets," said Antonio Horta-Osorio, chief executive of the combined British business.

He added: "Santander is committed to continuing the growth of its UK businesses profitably and has already shown through Abbey that it can drive efficiencies in operational areas in order to grow its retail business and provide customers with greater value-for-money products."

The cuts are part of plans to save GBP 180 million (EUR 200 million) by the end of 2011, after its takeover of Alliance and Leicester.

Santander said that there were no plans to close major offices, but added that some smaller sites would be merged. It also said that most of the job losses would be in back office and operational roles and include head office positions.

According to Andy Kerr, deputy general secretary of the Communication Workers Union, the job losses would be voluntary.

Shares in Santander were down 5.7 percent at EUR 6.44 in late Madrid trade.

The banking group announced in October that its third quarter net profit rose 4.3 percent to EUR 2.2 billion, adding that it was on track for record full-year profit despite an abrupt economic slowdown at home and global financial turbulence.

Earlier this month, Santander also received approval from the US Federal Reserve on its bid to acquire Sovereign Bancorp, which was weakened by the global financial crisis.

Unlike rival banking groups across Europe, Santander is in relatively good health, having avoided some of the problems in the US home loan derivatives market that have sunk many of its peers.

News of Santander's proposed job losses came as shareholders in crisis-hit British banking group HBOS approved a takeover by rival Lloyds TSB, according to partial results published on Friday.

Lloyds TSB agreed in September to buy HBOS in a deal worth 9.8 billion pounds after its target was left facing collapse owing to massive exposure to the US subprime mortgage crisis.

HBOS, Lloyds TSB and Royal Bank of Scotland received government bailouts last month after they were hit by the credit crunch and resulting financial crisis.

Britain's economy has struggled to deal with the impact of the international financial crisis, with the country teetering on the brink of recession for the first time since 1992 and experiencing the lowest interest rates since 1951.

[AFP / Expatica]

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