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Santander is closing a fifth of its UK branches as part of an overhaul of its domestic retail network, a move that puts about 750 jobs at risk.
Santander UK said on Wednesday it would “be better respond to customers’ changing needs” in order to close 95 of its 444 branches and cut service or time at more than 50 locations.
The closure could leave the UK retail market, which has been around since 2004, as Spanish lenders explore many strategic options for their UK businesses.
The group is unhappy with its high cost base for UK units and its weak returns, and the UK’s ring fencing regime, compared to some of the lenders’ other markets.
Santander discussed potential sales of UK retail with Natwest and rejected the unit’s “low ball” offer from Barclays last year, the FT previously reported. Santander says the business is “not for sale.”
UK banks have been trying to cut costs and focus their attention on digital services as they have been bolstering retreats from High Street in recent years and have plummeted branch footholds. Which consumer group? UK lenders estimate that over 6,000 branches have closed in the past decade.
In January, Lloyds Banking Group announced plans to close 136 branches across the UK to adapt to the transition to digital banking of its customers.
Santander said Wednesday that in addition to the closure, 36 branches will operate in a short period of time, with 18 going to be “counter-free” and five more going to be “work cafes.” The bank will have 290 full-service branches remaining.
The overhaul puts around 750 employees at risk of redundancy, the bank said.
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Santander has already cut its UK personnel and announced plans in October to unravel the roughly 1,400 roles in the country as part of a cost-cutting plan called “Project Nike.” The UK employs approximately 18,000 staff and has 14 million customers.
Santander said that digital transactions have risen by 63% since 2019, and “a rapid movement of customers” has been seen digitally choosing banks as banks. Meanwhile, transactions completed at branches fell 61% over the same period.
“As a business, we have to move with our customers and balance our investments everywhere we interact with our customers and provide the best of our present and future,” the bank said.
