Banking Reform and Santander UK plc
From 1 January 2019, the UK’s largest banking groups, including Santander UK plc (Santander UK), will be required to keep personal and small business banking services, such as current accounts, savings accounts and payments, in a separate part of their banking group. This is known as ‘ring-fencing’ and personal and small business banking services will have to be provided by a ‘ring-fenced bank’.
Why is ring-fencing happening?
The requirement for ring-fencing was one of the reforms brought in by the UK Government to strengthen the UK financial system following the financial crisis that began in 2007. Ring-fencing will protect personal and small business customers and the day-to-day banking services they rely on from unrelated risks elsewhere in a banking group and the wider financial system.
What ring-fencing means for Santander International customers
Our businesses in Jersey and the Isle of Man, operating under the brand name ‘Santander International’, are currently branches of Santander UK.
Santander UK scheme
Santander UK has now launched the UK legal process to restructure part of its business so that ahead of 1 January 2019 it is compliant with the ring-fencing legislation. The legal process is called a ‘ring-fencing transfer scheme’ and needs to be approved by the Prudential Regulation Authority as well as by the High Court of England and Wales.
You can find out more about ring-fencing and the Santander UK scheme, including the court dates and how you can make sure your views are considered, by visiting the dedicated website: https://www.santanderringfencing.co.uk
Jersey and Isle of Man
The Santander UK scheme will not affect the Jersey and Isle of Man businesses. However, under the UK ring-fencing legislation, a ring-fenced bank, such as Santander UK, is not allowed to have branches or subsidiaries outside of the European Economic Area, which includes Jersey and the Isle of Man. We are therefore proposing to transfer our Jersey and Isle of Man branches from Santander UK to another part of the Santander Group. The proposal is subject to regulatory approval and legal processes in Jersey and the Isle of Man and is separate to the Santander UK scheme.
We will write to you again outlining the changes for the Jersey and Isle of Man businesses, and how they will affect you, later in the year.