Is it safe to stick with Santander?

18 July 2012


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.
DH, Burton on Trent


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.