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Santander is to close a fifth of its UK branches as part of an overhaul of its retail network in the country, in a move that will put about 750 jobs at risk.
Santander UK said on Wednesday it would shut 95 of its 444 branches and reduce services or hours at a further 50-plus locations in order to “better serve the changing needs of its customers”.
The closures comes as the Spanish lender explores a number of strategic options for its UK business, one of which is potentially leaving the British retail market, where it has had a presence since 2004.
The group has become frustrated with the UK unit’s high cost base and its weaker returns relative to some of the lender’s other markets, as well as Britain’s ringfencing regime, people familiar with the matter previously told the Financial Times.
Santander has discussed a potential sale of its UK retail business with NatWest and also rejected a “low ball” offer for the unit last year from Barclays, the FT previously reported. Santander has said the business is “not for sale”.
Banks in the UK have stepped up their retreat from the high street in recent years in an attempt to cut costs and focus attention on digital services as footfall at branches plummeted. Consumer group Which? estimates that UK lenders have closed more than 6,000 branches in the past decade.
In January Lloyds Banking Group announced plans to shut 136 branches across the UK as it adapts to customers’ shift to digital banking.
Santander said on Wednesday that, in addition to the closures, 36 branches would operate on reduced hours, 18 would become “counter-free” and a further five would become “work cafés”, a co-working space that also provides some banking services. The bank will be left with 290 full-service branches.
The overhaul will put about 750 employees at risk of redundancy, the bank said.
Santander had already been reducing headcount in the UK and in October announced plans to axe about 1,400 roles in the country as part of a cost-cutting plan dubbed “Project Nike”. It employs about 18,000 staff in the UK and has 14mn customers.
Santander said it had seen a “rapid movement of customers” choosing to bank digitally, with a 63 per cent increase in digital transactions since 2019. Meanwhile, transactions completed at branches fell 61 per cent during the same period.
“As a business, we must move with customers and balance our investment across all the places where we interact with customers, to deliver the very best for them now and in the future,” the bank said.
