Santander is planning an exit from the UK in part to focus on bigger growth regions such as the US. Credit: JRomero04/Shutterstock.

Santander UK, the subsidiary of Spanish multinational financial services company Banco Santander, is considering a strategic review that may lead to its exit from the UK market, reported Financial Times.

The banking major is said to be reconsidering its UK presence 20 years after its acquisition of Abbey National.

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This revelation comes as the Spanish bank grapples with lower returns and legal challenges within its UK operations.

The bank’s UK operations have also not benefited as much from rising interest rates compared to other markets, the news publication added.

A former executive mentioned that the sale of the ringfenced bank has “always been a possibility” for executive chair Ana Botín.

No deal or announcement was imminent and that the review was at an early stage, the news publication added.

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The bank’s UK presence in the retail banking market began with the 2004 purchase of former building society Abbey National and expanded during the financial crisis with further acquisitions. It rebranded the combined entity as Santander UK in 2010.

The bank’s review includes a focus on growth regions such as the US, with recent expansions in corporate and investment banking.

Despite the potential retail and commercial banking exit, Santander is expected to maintain its corporate and investment banking operations in London.

The bank is said to have been trimming its workforce size in the UK and in October announced plans to eliminate 1,400 jobs as part of a cost-cutting initiative known as “Project Nike.”

It currently employs approximately 21,000 staff in the UK and serves 14 million customers.

Santander UK’s pre-tax profits have declined, with total assets standing at £275bn as of September.

The news publication quoted Santander as saying that “The UK is a core market for Santander and this has not changed.”