Officially Santander is declining to comment on the report, first broadcast by Sky News over the weekend, that Santander’s British arm was “reviewing the future of its Jersey-based private banking arm".
However, sources close to Santander said the bank was known to be conducting a review of the Jersey operation – which was rebranded as Santander Private Banking from Abbey International in 2010 – after having conducted a similar review of its Alliance & Leicester International business on the Isle of Man earlier this year.
No changes are thought to have been made as a result of that review.
Santander acquired Abbey in 2004.
Potential buyers of the Santander operation in Jersey could include the owners of other large private banking businesses such as Investec or Kleinwort Benson, the Sky News report noted.
However, Santander’s efforts to find a buyer for its Jersey operation are likely to be complicated by the fact that Jersey, unlike the Isle of Man or Guernsey, has a policy of not granting a banking licence to any institution that is not among the world’s largest 500 banks in terms of size.
Although being in the top 500 is not a guarantee that an institution will be granted a Jersey banking licence, the ‘Top 500 banks’ policy has been strictly enforced over the years by Jersey’s regulators, who have pointed to its success in keeping the island from having been hit, as some other centres were, by such bank blow-ups as BCCI, Northern Rock or any of the Icelandic banks.
News of Santander’s reported interest in selling its Jersey private bank is helping to keep Jersey’s banking sector in the spotlight. Last week,as reported, the Daily Telegraph revealed that HSBC’s Jersey operation was being investigated by HM Revenue & Customs after a whistleblower provided it with details of 4,000 UK clients said to include bankers accused of fraud, a “well known” drug dealer, and a man reportedly once dubbed London’s “number two crook”.
This news came months after it was reported, in May, that HSBC was planning to move its Channel Islands banking centre to Guernsey in 2013, leaving behind in Jersey a team that would focus just on its trustee business.
In a statement issued at the time, HSBC said the consolidation of its Channel Islands private banking operations in Guernsey made sense and would enable it to improve its service and efficiency.
Over the weekend, it emerged that Jersey affiliates of Jersey’s Deutsche Bank had held money allegedly belonging to the Brazilian city of São Paolo that had been stashed there by a former mayor, Paulo Maluf. A Jersey court ruled on Friday that the money should be returned to the city.
Maluf, who is currently a congressman in Brazil’s national government, has denied the charges, and even that he has any offshore accounts.