Santander UK reveals it paid 19 staff £1m or more

Banking giant Santander paid 19 staff more than £1 million last year and increased its bonus pool despite a year of hefty provisions for mis-selling scandals.

The Spanish-owned group said UK boss Ana Botin was the highest-paid executive, receiving some £4 in salary and bonuses, including a 24 per cent rise in salary to £2.1m last year and a £1.8m cash-and-shares bonus.

In the latest disclosure on pay packages in the banking sector, Santander’s annual report also showed recently promoted finance director Stephen Jones received £2.9m last year – including a £1.6m windfall relating to awards earned at his previous employer Barclays, paid as part of his package for joining Santander in 2011.

Sign up to our daily newsletter

The i newsletter cut through the noise

Steve Pateman, head of UK banking, received £1.9m in total after a £100,000 pay rise on being promoted to the role last April, while he was also awarded a £1.1m bonus for 2012, some of which is deferred for three years.

Another top executive received £2.6m last year, while one other senior banker at the group landed £1.7m, according to the report.

Overall, the bank’s bonus pool increased by 14 per cent to £150m.

The pay details came just a week after Barclays and Royal Bank of Scotland revealed that more than 500 workers between them were paid more than £1m last year.

Taxpayer-backed RBS said it paid 95 staff more than £1m, while 428 employees at Barclays also picked up pay deals worth over £1m – including five who got more than £5m.

Earlier this month, HSBC revealed 204 of its staff were paid more than £1m in the year, with 78 being based in the UK.

The disclosures have fuelled anger, coming after a year of scandal and further mis-selling revelations in the banking industry.

Santander put by a further £232m last year to cover costs such as compensation for mis-selling of interest rate swaps to small businesses, on top of £751m set aside in 2011 for payment protection insurance (PPI) claims.

The group said it had uncovered a number of former Alliance & Leicester small business customers who had potentially been mis-sold swaps, although it was looking at less than 500 cases overall.

Santander, which was formed from the takeover of Abbey, Alliance & Leicester and part of Bradford & Bingley, also reported falling UK profits in 2012, down 2 per cent to £1.23 billion.

But the firm insisted bonuses were increased to reflect an improved performance from the UK arm last year, with after-tax profits up by 4 per cent and net lending to small and medium sized businesses up 18 per cent in 2012.

Santander said while Botin’s salary was increased last year, her bonus was reduced by 27 per cent as it is also linked to performance at the wider Banco Santander group, which suffered a grim 2012 as profits plunged 59 per cent after an €18.8bn (£16.2bn) hit on soured property loans in Spain.

The bank plans to spin-off and float its UK operation, but probably not until next year at the earliest.

On the subject, the annual report noted: “The timing of this will remain subject to market conditions and to the emergence of a more positive outlook towards UK banks from investors.”