Santander UK will stop writing new asset finance business in the UK from the end of 2019.
According to reports in the Sunday Times, sources close to the bank said that low interest rates, UK regulation and Santander’s position behind the ‘Big Four’ had made competition difficult.
Tim Hinton, head of corporate and commercial banking at Santander, said: “The banking industry is changing at a rapid pace and to ensure that we can continue to grow and improve our business and meet more needs for our core customers, we made some changes to our operating structure and focus earlier this year.
“Having reviewed our priorities, we concluded that now is not the right time for us to invest further in our small asset finance offering, which comprises less than 5% of our lending to corporates and SMEs. We remain committed to continuing to support our corporate and commercial clients through our wide range of products and services.”
In June, the Telegraph had reported that Santander intended to cut costs by €1.2bn (£1.1bn) globally, meaning it would close around 1,150 retail banking branches, and with more than 3,700 jobs.
The lender said then that the restructure would affect its corporate and commercial banking division, with the report stating it would consult 330 staff about redundancy while creating 130 new roles.
Santander’s asset finance business in the UK is currently estimated to be worth around £800m. The bank said it would continue to support core clients through the provision of different types of lending, and would reduce its existing asset finance portfolio over time.
Santander UK had also entered into the funding competition for the BCR remedies £775m distribution of the RBS cash.
In June this year Premier UK Events, an event production company based in Leicestershire, secured a £460,000 funding package from Santander Business Banking to purchase a hi-tech LED video wall. The funding from Santander Business Banking included a £300,000 asset finance line.
In April Santander Business Banking has provided £50,000 asset finance funding to Axminster-based Axe Skip Hire for a 7.5 tonne DAF lorry.