Santander UK, the country’s third-largest bank in terms of savers, today reassured them the downgrading of its and its parent group’s debt ratings should not make them panic.
It issued a statement pointing out that the UK business could not send money back to its Spanish parent without the express go-ahead from the Financial Services Authority in London.
“There are no queues reported at our branches anywhere,” said a spokesman. Kent Council this week stopped placing overnight funds on deposit with the bank.
Credit ratings agency Moody’s cut the ratings of 16 Spanish banks overnight. Although it also cut Santander UK’s rating one notch to A2, that left it one point higher than the Spanish parent’s score of A3.
Moody’s said this was because “it reflects Santander UK’s general funding independence from Banco Santander; that Santander UK has no direct exposure to the Spanish government (or regional governments); and that as a systemically important bank in the UK, Moody’s believes there is a low likelihood that the FSA would allow Santander UK to substantially weaken itself in order to support the parent”.
Santander UK also pointed out that its customers are covered by the Financial Services Compensation Scheme, which protects savings of up to £85,000 per individual.
