Santander to slash UK costs as part of bid to save €1.2bn across Europe

Santander has unveiled plans to slash costs by a further €1.2bn (£1.03bn) in its European operations, including its UK business.

The bank said it would aim for incremental annual cost savings of €1.2bn through focusing on scale and efficiency – with a tenth of that hitting Santander UK.

Read more: Santander UK profits slump 14 per cent in "uncertain" environment for banks

It said around €1bn of those savings would come from its European cost base, made up of the UK, Spain, Portugal and Poland.

The move would help the bank meet profitability targets of 13 to 15 per cent return on tangible equity in the next three years, it said, – compared with 11.7 per cent in 2018.

Earlier this year spanish owner Banco Santander announced plans to shut 140 UK branches, putting 1,270 jobs at risk.

In a presentation to shareholders, chief executive Jose Antonio Alvarez said the UK business would focus on cost management and enhancing efficiency through digitalising the bank.

Shared services used across the bank’s regions, including the UK, will also be streamlined to save €220m of the €1.2bn target.

The bank also pledged to invest more than €20bn into digital and technology advancements over the next four years.

Read more: Santander cuts 140 branches – putting 1270 jobs at risk

Chairman Ana Botin said: “Technology is changing banking as we know it and we are positioning the company to capitalise on the world class assets we have across the group, including our technology, talent and scale.”

“This will allow us to benefit from the opportunities presented by digital innovation and will result in us becoming a digital leader in global financial services for the next decade.”