Santander is overhauling the management of two of its key European businesses, including starting the search for a new chief executive in the UK, as it looks to boost profitability after reporting its strongest quarterly earnings in more than a decade.
Nathan Bostock, who has led Santander UK since 2014, will step down around the end of the year to take on a newly created role overseeing the group’s various investment platforms.
Much of Bostock’s tenure was marked by falling profits and challenges at the UK business, which was built through a series of acquisitions of former building societies in the 2000s. A writedown of the business’ goodwill value drove the 164-year-old bank to its first ever quarterly loss last year.
However, his successor will take over at a time of rising optimism as the bank’s earlier cost-cutting initiatives begin to bear fruit and an improving economic outlook boosts growth prospects.
“The bank is now extremely well positioned to succeed in the future with a clear strategy and an excellent platform for his successor and executive team colleagues to build on,” said William Vereker, Santander UK chair.
Santander UK was one of the multinational bank’s fastest-growing markets in the first three months of the year, along with the US and its corporate and investment banking division.
Net profits across the group leapt to €1.6bn in the first quarter, from €331m in the same period last year. Using the bank’s preferred underlying profit measure, which excludes certain restructuring costs, the results marked Santander’s most profitable three-month period since the second quarter of 2010.
The improvement reflected a sharp fall in provisions for potential loan defaults. New impairments dropped 49 per cent year-on-year to €2bn. However the group did not follow the example of US banks such as JPMorgan and European rival HSBC in releasing some of the provisions that it had put aside last year.
Ana Botín, Santander executive chair, said the results “highlight our relentless customer focus and the strength of Santander’s diversification”. She said the bank was confident of meeting its previously announced aims of increasing profitability and reducing credit losses, though she added that “the success of the vaccine rollout remains critically important to economic recovery”.
António Simões, the former HSBC banker who joined as regional head of Europe last year, will take direct responsibility for the company’s home market as chief executive of Santander Spain in addition to his existing role.
Simões has been working to integrate the bank’s European businesses, which include retail banks in Spain, Portugal, the UK and Poland.
Incumbent Santander Spain boss Rami Aboukhair will become global head of cards and digital solutions.
In the UK Susan Allen, who reported to Bostock as chief of retail and business banking, will leave the bank during the summer. Her responsibilities will be split between a new head of everyday banking and head of homes.
People close to the group said Tony Prestedge, who joined as Santander UK deputy chief executive last year, is seen as one potential replacement for Bostock. One person stressed that the bank will be carrying out a full search process that will include external candidates.