Santander UK's Cater Allen Private Bank has shut down its structured products issuance for the next 12 months as part of a strategic review of its investments and structured products business at a group level.
A senior source at Santander's private banking arm in the UK told SRP that the decision to halt the issuance of structured products is part of the group's strategy for the next 12 months in order to focus on other areas of traditional banking and to redeploy resources.
"The decision is not based nor is a reflection of the pricing environment but on the need to focus our efforts in achieving short-term objectives such as developing our banking services for the intermediary sector," he said. "We are currently focusing on other investment products but we will continue to service the back-book on our structured products offering until a final decision is made."
The decision to cease Cater Allen's structured products offering follows Santander UK's decision to stop selling structured products through its adviser unit in December 2012 and move the distribution of its structured products through online channels only.
This decision resulted in a reduction of the bank's sales force including the redundancies of around 400 branch-based sales advisers between March and May.
Cater Allen has marketed only four structured deposits so far this year compared to ten structures launched in 2012. SRP data also shows that Santander UK has marketed 20 structured products so far this year but has not issued any new tranches since May.
"Santander is currently undertaking a strategic review of the bank's investments and structured products proposition and at this time is selling structured products for new business via the website on a non-advised basis," a Santander spokesman told SRP. "Cater Allen has ceased offering structured deposit plans until further notice."
According to the Santander spokesman, there is no timeframe for the strategic review to be finalised although no further staff redundancies are planned at this stage.
"This may be a case of revolving doors. I think that as one or two providers exit the market there are at least three foreign banks on the sidelines looking at the market, working on business plans and market entry ideas which could follow BNP Paribas - which recently launched its Starpoint range - in becoming major players," managing director at structured products consultancy The Investment Bridge, Chris Taylor, told SRP. "This could also be the consequence of the pressures on providers which have been heavily promoting structured deposits on the high street taking a step back, possibly as a result of top-down political pressure and general regulatory scrutiny, but I don't think that this is a reflection of the structured products market which has seen a vibrant revival through the independent professional advisory channel."
SRP confirmed that the head of structured products at Cater Allen, Fernando Gasca, continues in his position at the bank.