Is it safe to stick with Santander?
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Question
Given the parlous state of the Spanish economy, is it safe to put my savings into an ISA with Santander?
I believe it is a Spanish bank and so am worried I would lose my money if it went bust.
Answer
Santander UK is owned by Banco Santander - regarded as the strongest Spanish bank. But like all other Spanish banks, it is having to find hundreds of millions of euros to cover losses on property lending.
But the bank has a 'firewall' policy on borrowing and lending in the various markets in which it has an interest. In effect, this is a pledge that all money raised in the UK stays in the UK.
The bank says that the only way the Spanish parent company could receive money from its UK arm would be through a dividend payout.
However, this would have to be approved by the UK's Financial Services Authority to ensure that Santander UK continued to comply with capital adequacy rules.
In theory, your money should be safe anyway: under the FSCS, UK savers' deposits are guaranteed should the bank fail up to a limit of £85,000 per person and banking institution.
So as long as you don't have more than £85,000 banked with Santander you will be fine.
Francis Klonowski
is principal of Klonowski & Co in Leeds.
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I have found several readers comments about Santander, now and in the past, to be Xenophobic ("unduly fearful or contemptuous of that which is foreign, especially of strangers or foreign peoples"). This is in part due to unhappiness with the takeover of our beloved local banks, and partly just traditional Xenophobia...
Santander had the most complaints before not because they were Spanish but because of several large & mis-managed mergers. They are no longer the bank with most complaints - that is now Barclays which according to the Telegraph in June-2012, "...scored particularly poorly for telephone, online and overall customer service". According to Daily Mail & Moneywise survey in May-2012, RBOS/Nat West is "Britain's least-trusted financial institution".
The financial crisis in 2008/9 in the world emerged in USA & UK & Banks from these countries (and later Iceland!) not in Spain, Germany etc
Santander continues to have the good rates for savings which is why I have several ISAs with them. As long as I am below the £85,000 limit, why worry?
Yes, and I am really going to trust the UK Government to pay me back my £85000 if the banks go bust! UK PLC is in masses of debt itself, do you REALLY believe that they are going to pay out if millions of people lose money through their banks?
One has to look at the 'whole picture' rather than what Abbey/Santander does for one at the moment!!
Abbey/Santander have had a lot of bad press over the past couple of years and still get quite a lot!!
Since the Santander takeover of Abbey, from personal experience the company has gone down hill rapidly!! All the good staff seemed to have left. Some Customer Service Departments of Santander 'leave a lot to be desired' and are extremely rude!!
I have got out of the bank two years ago - thank goodness!!
I do not think that the UK government will want to bail out any more banks that collapse, as that would totally derail any recovery and push up the UK governments interest rates on borrowings!
Santander UK is highly exposed to the UK Lending market for mortgages, so a property collapse, non recovery, or people being unable to pay their mortgages would push them to the edge!!
What puzzles me is why did Santander Spain open a UK subsidiary if they don't get anything out of it? Although more than happy with my long-term association with Abbey/Santander it does make one wonder!
I have also banked with Santander (Abbey) for many years, have found their online service very satisfactory and efficient, their branch personnel always helpful. Santander UK operates separately from the Spanish counterpart, and I also think people should stop spreading unnecessary gloom and foreboding about them.
I think that it is right to avoid anhting to do with Santander, anywhere worldwide.
Irrespective of government guarantees, in light of all the banking scandals of the past couple of years - anything is possible!!
In other banks, monies from one part have disappeared in to the parent companies coffers-who is to say that the same thing could NOT happen here?
Santander UK are refusing to make good their miss selling of products and referring majority of cases to the Financial Ombudsman Service, a delaying tactic - do they have a shortage of 'readies'??
I have read that Santander wanted to sell all or part of their UK operation over the past couple of years and the valuation has progressively declined from £4bn to £1bn - makes one wonder??
Why "Avoid anything with the name Santander on it."
That sounds as if they spread the plague. They have had problems following all their merging of banks but your comments are a bit strong. I have banked with them for many years and never any problems. Their online services work just fine for me. Their interest rates are pretty good too. Stop treating Santander as if they are a leper.
The name 'Santander' seems to be synonymous for 'Bad Service'. Unless 'one' has had dealings with this 'outfit' and its predecessors across all 'ranges' of products then your comment is useless!!
I worked for an independent Banking Organisation, who similarly received 'Bad Treatment' for its clients. The amount of time &expenditure taken to resolve issues were all to consuming.
Santander is too big both domestically and internationally.
I think the smaller companies, building societies and even credit unions are better managed - one may not get the highest of returns, but i think the service is a lot better and one 'sleeps easily' at night!
