Santander UK is reducing jobs within its commercial banking sector as part of a broader restructuring aimed at making the bank more appealing to potential buyers.
This shift was somewhat unexpected. Earlier this month, the bank altered job titles, signaling a comprehensive review of its UK operations and began reorganizing staff into new teams.
The abrupt nature of these changes has left many bankers feeling unsettled. Some have found themselves in teams where wages are up to 25% lower than previously. While banks aren’t allowed to directly cut salaries, Santander has opted to freeze wages for those in lower pay brackets. Recent emails, as seen by the Guardian, hint at upcoming adjustments to the bonus scheme as well.
In addition, employees of the Santander Navigator Arm face the threat of redundancy, just three years after it was celebrated as a comprehensive solution for international trade.
With new pay measures and the threat of job cuts, the total number of affected staff could reach around 200.
Analysts from RBC Capital estimate that this could result in up to £1.9 billion in compensation owed to prior borrowers.
Creating a leaner operation might attract a larger customer base—around 14 million—which appeals to prospective buyers. Earlier this year, it was indicated that Santander UK might be on the market, though the Spanish owners denied actively seeking buyers.
Banco Santander, based in Madrid, reportedly turned down an £11 billion offer from a British retail bank earlier this year, considering it too low, according to the Financial Times.
The implications for wage reductions could extend to new hires, which may lead Santander UK to recruit more staff outside of London.
This also impacts their international and transaction banking divisions, which have historically earned less compared to industry peers, despite managing cross-border payments and trade.
Additionally, it seems the cuts affect some social activities, including the cancellation of the annual charity cricket match usually held in June.
Last year, Santander UK initiated substantial job cuts, affecting around 2,000 positions, and in February mentioned plans for “simplification and automation” aimed at enhancing cost efficiency by 2025. In March, the bank revealed it had shut down 95 of its 444 high street branches in the UK, further reducing services at 50 locations and putting 750 jobs at risk.
A spokesperson for Santander UK remarked on the updates regarding salary and recruitment, stating they are moving towards a more equitable and transparent bonus structure designed to encourage high performance throughout the bank. They also mentioned that they consistently review job data across their organization.
According to them, banks are adapting to a shifting environment shaped by evolving customer expectations. They emphasized the necessity for a dynamic operational model that prioritizes effective organization for keeping customer needs central.
In relation to launching Santander Navigator globally, the bank indicated that a new structure would better support businesses trading internationally or aiming for trade growth.
Furthermore, a Santander representative asserted that the bank is not looking to divest its UK operations, stating, “As we have noted, the UK remains a core component of Santander’s diversified business model and is not for sale.”
