Santander UK is freezing salaries, slashing bonuses and cutting jobs across its commercial banking arm as part of a wider shake-up that could help make the bank more attractive to potential buyers.
The bank began unexpectedly changing bankers’ job titles and shuffling staff into new teams earlier this month amid a larger review of the Spanish lender’s UK business, where there is mounting frustration over regulations and costs.
The moves, and the abrupt way they were communicated, have upset bankers, many of whom have been forced into teams where the pay ranges are up to 25% lower than before.
While the bank cannot cut salaries, Santander has frozen the pay of staff who are now in lower pay brackets than previously. Email correspondence seen by the Guardian shows staff have also been warned over changes to their bonus schemes, which are expected to result in lower payouts.
Meanwhile, employees from the bank’s Santander Navigator arm have been put at risk of redundancy, only three years after the platform was launched with much fanfare as a “one-stop shop for international trade”.
Together the new pay measures and job cuts could affect up to 200 staff.
It comes as Santander tries to find new areas to slash costs as it steels itself for a fallout of the growingcar finance commission scandal, which analysts at RBC Capital say could cost the bank up to £1.9bn in compensation to its former borrowers.
A leaner business could make the bank, which has about 14 million customers – more attractive to potential suitors. In January, it emerged that Santander UK could be put up for sale, although the Spanish owner has denied it is actively seeking to offload the lender.
Banco Santander, the parent company, which is headquartered in Madrid, reportedly rejected an £11bn bid for its UK retail bank earlier this year for being too low,according to the Financial Times.
The lower pay potential across the corporate and commercial bank will apply to new hires, and may mean that the UK bank, which is headquartered in Milton Keynes, will hire more staff outside London, where bankers may be ready to accept lower salaries.
That includes staff in Santander’s international and transaction banking department – which manages cross-border payments and trade – who are now being categorised as back office staff, traditionally paid less than client-facing peers.
The Guardian also understands that the cuts have extended to extracurricular events, with the corporate and commercial bank’s annual charity cricket day match, which usually takes place in June, having also been cancelled.
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Santander UK started slashing about 2,000 jobs last year, and in February announced it was looking at how further “simplification and automation” of the business could “help drive cost efficiencies in 2025”. In March the bank revealed it was closing 95 of its 444 high street branches in the UK and reducing services or hours at a further 50 sites, putting 750 jobs at risk.
Commenting on the pay and job cuts, a spokesperson for Santander UK said: “We are moving to a fairer, more transparent bonus structure across Santander UK, which will promote high performance at every level of the bank. We regularly review job data across the bank, and we annually agree salary increases with our recognised trade unions.”
They said the bank was responding to an evolving banking environment “driven by changing customer expectations”, adding: “We must have a dynamic approach to our operating model that ensures our teams are organised effectively to keep the customer at the heart of our business.”
The bank said that involved launching Santander Navigator globally “with a proposed new structure that will strengthen our ‘Beyond Banking’ offering to businesses who trade, or have ambitions to trade, internationally”.
Santander’s spokesperson also denied that the bank was looking to offload the UK business. “As we have made clear, the UK is a core part of Santander’s diversified business model and is not for sale.”