Santander bets on exporters to boost its UK banking business

By Sinead Cruise and Iain Withers

LONDON (Reuters) - Santander, one of Europe's biggest banks, is targeting British companies grappling with post-Brexit trading snags, in a direct tilt at a business where rivals like HSBC have traditionally dominated.

The British arm of the Spanish bank is expanding its services to businesses trading internationally as it chases an edge in the competitive corporate lending sector, going head to head with the likes of HSBC - which once styled itself as 'the world's local bank'.

Santander's Navigator platform, a key cog in the corporate and commercial strategy overseen by UK CEO Mike Regnier, seeks to match clients with export ambitions to possible partners, customers and suppliers across the bank's global network.

According to Santander, many customers in Britain cited regulation, bureaucracy, difficulty in finding new markets and a lack of local expertise as hurdles to international expansion.

Since its soft-launch in 2022, Navigator has supported around 1,000 businesses to grow internationally, said Regnier. Santander wants to at least triple active users on the platform by end-2023.

It signed up actor Brian Cox - who played media mogul Logan Roy in U.S. television series Succession - to front a multi-million pound advertising campaign encouraging customers to make new connections to propel businesses into new markets.

The bank's push comes as Britain labours to increase its export activity after withdrawing from Europe's single market.

The Bank of England forecast last month that annual growth in Britain's export volumes would not top 0.5% over the next three years. Official budget forecasts estimate exports and imports will be around 15% lower in the long run than if the UK had remained in the bloc.

ROLL-OUT

According to S&P Global, Santander is Europe's fourth largest bank by assets with 1.74 trillion euros ($1.86 trillion). It has a presence in 10 core markets across Europe and the Americas, compared with HSBC's 62 globally. The Spanish bank says it supports clients with export and import interests in more than 150 countries.

A spokeswoman for HSBC declined to comment for this article.

Max Sheridan, Managing Director of Liverpool-based medical devices company Algeos told Reuters that Santander's Navigator had helped to pinpoint new international markets to target and more efficiently calculate shipping costs.

Navigator is being run from Britain but could be launched in other countries over time, John Carroll, head of international and transaction banking at Santander UK, added.

Corporate and commercial loans currently account for just under 10% of Santander UK's overall loan book.

Santander did not disclose the financial resources deployed to create the platform but around 30 staff were working solely on the concept, with the rest of its corporate and commercial banking team focused on its roll-out.

Santander UK was fined 107.7 million pounds in December for "serious and persistent" gaps in anti-money laundering controls for more than 560,000 business customers between 2012 and 2017.

In a statement issued on the same day as the fine, Santander said it had made "significant changes" to overhaul its financial crime technology, systems and processes.

($1 = 0.9333 euros)

(Additional reporting by David Milliken. Editing by Jane Merriman)