MADRID (Reuters) - Banco Santander UK has transferred 22.9 billion pounds of assets and 20.7 billion pounds of liabilities to its Madrid-based parent group, the bank said, in a move to comply with new ring-fencing rules that come into force in 2019.
Banks operating in Britain must separate deposit-taking operations from riskier, investment banking before January 2019. Personal and small business banking services will have to be provided by a ‘ring-fenced bank’.
The assets shifted to the parent group represent 7 percent of Banco Santander’s British assets and 6.7 percent of its liabilities, according to the bank’s financial report for the first half of the year published on August 10.
Abbey National Treasury Services is among the businesses being transferred.
Madrid-based Banco Santander also has a London branch to which some of the assets could be transferred.
The Spanish bank, which did not elaborate if the move would involve transferring staff from London to Madrid, has been working on its ring-fencing plans for some time.
However, the move comes at a time when the European Central Bank is putting pressure on banks to shift investment banking activities from London to the continent before Britain leaves the European Union next year.
The ECB wants to prevent investment banks setting up empty shell companies on the continent while still supplying their services from London, a source told Reuters earlier this week.
On Monday, Deutsche Bank said it would move assets from London to Frankfurt after Brexit and make the German city the primary booking hub for its investment banking clients, rather than London.
