Santander to float UK arm in £4bn IPO

Spanish bank Santander is planning to float its UK subsidiary later in the year for some £4bn, making it the largest IPO for the London Stock Exchange since the financial crisis.

Executive chairman Emilio Botín says the bank will further expand into other regions such as the UK and emerging markets so it is not dependent on the Spanish market, which has suffered since its property bubble burst three years ago.

An IPO is scheduled for the second half of the year, subject to market conditions. Previous plans to float the UK arm had been delayed due to continuing uncertainty in the markets.

The bank reported yesterday profits fell 8.5% to €8.18bn (£6.95bn) largely due to write-offs for bad loans, a result of the property bubble in Spain.

However, profits from its expansion into emerging markets have offset part of the losses made during the global financial crisis.

The FT reports a sale of 20% of the UK business would amount to £4bn, making Santander UK the sixth largest bank in the country by market value.

In 2009, Santander raised more than $7bn with an IPO of its Brazil subsidiary.