Spanish banking giant Santander has shelved plans to list its UK arm on the London stock market, after having to set aside £538m compensation for thousands of customers mis-sold payment protection insurance.
It had originally planned to float its UK business in the second half of last year, which was put off until spring this year. But after posting a disappointing set of results yesterday, it said there was little appetite from the market for the move against such a grim economic backdrop.
The float in now on ice until the end of 2013 at the earliest.
Gary Greenwood of broker Shore Capital said: ‘I can’t say this is a surprise. The hope was that the economic environment would improve, but things are getting worse if anything. It’s not the time to try to float a bank.’

In a sobering start to this year’s reporting season, the bank posted a 42 per cent slump in UK profits – down to £1.31bn from £2.25bn in 2010.
As well as the compensation bill it blamed increased regulatory costs, including stricter requirements on the amount of capital it has to hold in reserve.
The Santander Group also revealed a 35 per cent drop in net profits to €5.35bn (£4.48bn) from €8.18bn (£6.7bn) in 2010, largely due to the Spanish property market going bust.
The disappointing performance will heighten scrutiny on chief executive Ana Patricia Botin’s first bonus since taking over from Lloyds chief executive Antonio Horta-Osorio in December 2010. She received a £1.4m windfall last year but the latest round of pay packages will not be revealed until March.
However, a major push on credit cards and a high-profile sweetener of up to £300 to switch to Santander have both proved fruitful. Credit card sales were up by 24.8 per cent to 543,000 while 836,000 new customers opened a current account.
Lending to small and medium-sized firms grew a quarter to £4.3bn – beating the government’s Project Merlin target of £4bn last year.
But sales of investments and pensions fell by over a fifth to £2.8bn as customers shied away from the stockmarkets.

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