Newspaper article The Evening Standard (London, England)

Santander in a Sweet Spot but for How Long?

Newspaper article The Evening Standard (London, England)

Santander in a Sweet Spot but for How Long?

Article excerpt

Byline: Anthony Hilton city comment

IF Santander did not exist in the UK, it is tempting to ask whether anyone would invent it because, unusually among brands, it is as much defined by what it is not as what it is.

It is not a mutual like Nationwide although it is one of the biggest players in mortgage lending. It is not a High Street giant like Barclays, HSBC, Lloyds or RBS. Indeed, it is number five, a position business school strategists say is not where you want to be, where the others dominate the market and you are condemned to follow without their advantages of scale.

It is not a niche challenger like Aldermore or Shawbrook, where you can make money by staying small and specialised. It does not have any investment banking activities like Barclays or HSBC, where you can make big money on the occasions you get it right. It is growing but it still not a huge lender to small businesses, the area where we are told there is the greatest need. Even if, as many expect, it does soon buy the 300-branch Williams & Glyn brand of Royal Bank of Scotland, it will not fundamentally change the nature and scale of the business.

But none of these caveats seem to matter because, whatever Santander is in banking terms, it seems to have a formula that is working. It announced today that profits were up 43% at PS1.9 billion before tax and ahead 37% at PS1.3 billion net. The banking sector has been mired in crisis for so long that one had almost forgotten it could deliver that kind of performance. It is respectable by any measure.

Chief executive Nathan Bostock says it comes down to thinking and behaving like a challenger bank, and embracing that culture even if you are atypical. This is his cue to talk about customer service, innovative products, the intelligent application of technology and creating the perception among customers that its products and services deliver value. …

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