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June 10, 2012 5:09 pm
Santander has reassured its UK customers that their deposits will be shielded from the turmoil which is engulfing parts of the Spanish financial sector, home of the bank’s retail operations.
Santander customers have been getting in touch with the high street bank, the UK’s fifth largest, following news that Spain had sought a eurozone bailout, of potentially up to €100bn, for its troubled banking sector.
Santander UK has 25m savings and mortgage customers across its brands including Cahoot. Millions more account holders with Royal Bank of Scotland are in the process of being transferred to Santander following a takeover.
In spite of its Spanish ownership, Santander UK said that its British operations were autonomous from its parent group meaning UK account money cannot be sent offshore.
“We have been contacted by customers asking about the financial security of the UK branch of Santander,” says Jonathan Akerman spokesman for Santander UK.
“We can completely assure them that all the money raised in the UK, stays in the UK. UK deposits cannot be borrowed or siphoned by Santander’s parent group.”
Mr Akerman says even though the UK operation is part of the global group, Financial Services Authority (FSA) rules prevent British account money from going overseas.
“We do not have the means of providing money to Spain even if they asked for it,” he added.
Madrid-based Banco Santander is one of the eurozone’s leading banks and is among the top 15 financial institutions worldwide in terms of market capitalisation.
On Sunday, Banco Santander said: “The capital injections into those banks that request them will set the stage for the conclusion of the restructuring of the financial sector, eliminating uncertainty and contributing to the country’s economic recovery.”
The reassurance for UK customers comes just weeks after Santander UK reported a “slight” increase in withdrawals – to about £200m – from nervous retail customers following sweeping credit downgrades in Spain.
As Santander UK is authorised and regulated by the Financial Services Authority, deposits are protected up to a maximum of £85,000 by the Financial Services Compensation Scheme.
The limit applies across the bank’s subsidiaries, which means savers who have accounts with Cahoot will only be covered once.
UK expats who have accounts with Santander in Spain will be covered up to a maximum of €100,000 under the European deposit protection scheme.
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