April 30, 2014 / 6:47 AM / in 4 years

UPDATE 2-Santander UK expects new chairman this year as Burns steps down

(Adds details on possible candidates, IPO plans)

By Steve Slater and Brenda Goh

LONDON, April 30 (Reuters) - The British arm of Spanish bank Santander said its chairman Terry Burns is stepping down and it intends to have his replacement in place by the end of the year, as the UK business prepares for a stock market listing.

Santander UK, which signaled a turnaround programme is on track earlier this week by reporting strong profit growth, could get its own listing later this year or early in 2015.

That would require clarity in the leadership and Santander UK said on Wednesday Burns, 70, will stay as chairman until a replacement is found.

A frontrunner to replace him could be Bruce Carnegie-Brown, who is a non-executive director of Santander UK and worked for U.S. bank JPMorgan and several insurers.

But some executive recruiters and industry insiders have warned of a shallow pool of top qualified candidates, and rivals Barclays, Royal Bank of Scotland and Nationwide are also expected to be on the hunt for chairmen.

Bank chairmen are expected to have wide banking and regulatory experience as well as being untarnished by the financial crisis of 2008 and 2009.

Burns’ exit is not a surprise as he has been chairman since February 2002 and in January he resigned from the board of the Madrid-based Santander group.

But it adds to potential change at the top of UK business, which is still awaiting the arrival of Nathan Bostock as deputy chief executive, after announcing in December it had poached him from RBS. UK Chief Executive Ana Botin is also tipped to replace her father to run the group at some stage.

A flotation of the UK business has been under consideration for several years, but was delayed by the UK recession and a shift in focus to more profitable business loans and reduced lending to home owners.

That rebalancing is nearing completion and the bank said it is winning customers who are switching from rival banks and was benefiting from an improving UK economy.

Santander UK, which has 15 million customers, about 1,200 branches and 24,000 staff, made a pretax profit of 416 million pounds in the first quarter of this year, up 48 percent from a year ago as revenue rose 13 percent on the back of a sharp rise in margins.

It contributed a fifth of Santander’s group profits, matching Brazil as the biggest contributors. (Editing by Matt Scuffham and David Holmes)

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