LONDON Jan 30 Britain's financial regulator has
blocked Santander UK's plan to give its incoming deputy chief
executive responsibility for risk management as it believes the
two roles could come into conflict, people familiar with the
The British arm of Spain's Santander last month
said Nathan Bostock, currently finance director of Royal Bank of
Scotland, would join it this year in the joint role of
deputy chief executive and chief risk officer.
But the Prudential Regulation Authority (PRA), part of the
Bank of England, told Santander it was unhappy the executive
overseeing the risk function would also be in a role responsible
for lending decisions, the sources said.
Bostock will take the deputy CEO role, and someone else will
fill the risk role, one of the sources said.
The PRA and Santander, which also released fourth-quarter
results on Thursday, declined to comment.
The PRA took a similar position last year when it told
Standard Chartered that its finance director, Richard
Meddings, should not have responsibility for risk, too.
There is no rule against executives having dual roles, but
the PRA's stance has made it clear it does not want the head of
risk management to be in charge of lending decisions, which
could create a conflict of interest.
Bostock is still at RBS, which this week warned it would
incur 3.1 billion pounds ($5.1 billion) in new charges related
to past misconduct - likely to leave it with a 7-8 billion pound
loss for 2013.
Bostock, who has not been given a start date at Santander as
RBS searches for his replacement, is tipped by many as a future
chief executive of Santander UK.
Santander is expected to float off its UK arm, but the
Madrid group's CEO said on Thursday that wouldn't happen this
year, signalling 2015 at the earliest.
The UK business is restructuring to focus on more commercial
lending and less on residential mortgages. It cut its UK
mortgage loan book by 8.5 billion pounds last year and increased
commercial loans by 2.5 billion, taking commercial lending to 12
percent of total loans. It aims to get that share up to 20
percent and said it plans "significant" investment this year to
expand commercial lending.