LONDON, September 16 - Spanish bank Santander’s (SAN.MC) planned London listing of its British operations is unlikely before 2013, a person familiar with the matter said on Friday.
Santander had already delayed its plan for a 2011 flotation of 20-25 percent of the British arm due to market conditions and regulatory uncertainty. The IPO could raise about 4 billion pounds.
The source said the delay was due to several factors: this week’s Independent Commission on Banking recommendation that banks separate core retail businesses from wholesale activities; difficult market conditions; and a delay to the integration of branches bought from Royal Bank of Scotland (RBS.L).
A Santander spokesman declined to comment other than to cite comments made by chief executive Alfredo Saenz on July 27, when he said the process would be delayed.
“The market was already speculating that Santander could delay its IPO plans (in Britain) till the second half of 2012 but if you take into account market volatility, new British banking regulation and poor growth expectations, it makes perfect sense to put these plans off till 2013,” said Nuria Alvarez, banking analyst at Madrid-based brokerage Renta 4.
Santander UK was formed by the acquisition of Abbey National and two other former building societies. While it is less affected by the ICB recommendations than some bigger rivals as it does not have a large investment banking division, it has been assessing how the reforms will affect its structure.
Santander agreed to buy 318 branches from RBS over a year ago, and the deal was expected to complete early in 2012. RBS said last month completion had been and was not expected to complete until the second half of next year.
Santander shares were down 0.3 percent at 10:15 a.m., underperforming a 1.6 percent higher European banking sector .SX7P. ($1 = 0.633 pound)
Reporting by Steve Slater and Stephen Mangan in London, and Jesus Aguado and; Paul Day in Madrid; Editing by Greg Mahlich and Dan Lalor