(Updates with CEO comment from fourth paragraph.)
July 27 (Bloomberg) -- Banco Santander SA postponed the initial public offering of its British unit, which incorporates the former Abbey National and Alliance & Leicester businesses, amid a rout in U.K. bank stocks.
The lender won’t carry out the IPO this year because of “uncertainties” over the right timing, Chief Executive Officer Alfredo Saenz said on a webcast for analysts today. Saenz said last month it was a “priority” for the bank to hold the offering in the second half after delaying the sale from the first six months of this year.
Santander is the U.K.’s second-largest mortgage lender behind Lloyds Banking Group Plc following its purchase of Abbey National, Alliance & Leicester and parts of Bradford & Bingley Plc. Shares of Britain’s five biggest banks have declined in London this year, with Lloyds sliding 34 percent, Barclays Plc 16 percent and Royal Bank of Scotland Group Plc 10 percent.
Uncertainties relating to U.K. banking regulation and delays to the integration of Royal Bank of Scotland Group Plc branches make the outlook for the IPO unclear although it may happen next year, Saenz said.
The integration of 318 branches bought from RBS in 2010 planned for the first quarter of 2012 may now complete in the third or fourth quarter, Saenz said at a news conference today in Madrid. “It’s like changing the wheels of a car with the car still moving,” he said.
The Spanish lender may seek to sell as much as 25 percent of its U.K. division in the IPO, a person with knowledge of the matter said in January. The offering was delayed earlier this year after the former British-unit’s CEO Antonio Horta-Osorio moved to Lloyds.
The outlook for Santander’s planned IPO of its Argentina unit is still unclear and the bank will press ahead with it when market conditions are right, Saenz said.
--Editors: Jon Menon, Francis Harris
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