In a document given last week to the SEC, the Spanish bank warned the US markets regulator about the consquences that the UK´s exit from the EU could imply, the process known as Brexit. According to the Spanish bank, Brexit could result in increased financial instability and reduced economic growth, as well as increased unemployment and inflation in the UK, in addition to having adverse impacts on the bank´s business.
Santander recognises that the process “could lead to a greater market volatility and changes in the fiscal, monetary and regulatory environment in which it operates and could have an adverse effect on the bank, including its ability to access capital and liquidity at aceptable financial terms and, more generally, in its operational results, financial condition and projections”.
Santander highlights the limited progress in the negotiations between the UK and the EU, which increases the possibility that the UK leave the EU on 29 March 2019 without an exit agreement. According to the bank, it is probable that this Brexit causes a significant economic and market disruption. In addition, the bank explains to the regulator that the lack of clarity over the impact of the referendum on the EU in the UK about residence permits in the long run could cause problems for its subsidiaries in contracting adequate staff, which could have a negative impact on its business.