Regulator Threatens RBS Chief's Role At Rival
The appointment of Royal Bank of Scotland's finance director to a dual role at rival Santander UK was in jeopardy on Wednesday after banking regulators raised concerns about the move.
Sky News can reveal that the Prudential Regulation Authority (PRA) has expressed serious doubts about Nathan Bostock's appointment to the Spanish-owned bank as deputy chief executive and chief risk officer.
Sources close to the regulator said it was unhappy with the prospect of a single executive overseeing the risk function at a major bank while occupying an executive post responsible for decisions about the same institution's balance sheet.
It is not clear whether Santander UK will be able to assuage the concerns of the PRA, which was established last year as an arm of the Bank of England.
If it cannot, it is thought that Mr Bostock is still likely to join the lender, although whether that will be as deputy chief executive or chief risk officer - or in an alternative role - is unclear.
One scenario could involve a new chief risk officer being recruited to report to Mr Bostock as deputy chief executive.
News of the PRA's concerns emerged just hours before Santander and its Madrid-headquartered parent report annual results for 2013.
Insiders said on Wednesday that contrary to recent media reports, Santander was likely to rule out an imminent flotation of its UK subsidiary.
Sky News revealed in December that Mr Bostock was planning to defect from Royal Bank of Scotland (RBS) after just 10 weeks as the beleaguered bank's finance director.
Santander UK subsequently confirmed the news in a statement, saying: "Subject to regulatory approval, Nathan Bostock will be appointed as chief risk officer and deputy CEO to Ana Botin and will join the board of Santander UK as an executive director."
RBS has yet to name a successor and on Monday shocked the stock market with an unscheduled trading statement which said that it would have to set aside an additional £3bn to cover litigation costs and a rising compensation bill for product mis-selling.
The PRA is not understood to harbour doubts about Mr Bostock's competence, but has in recent months intervened at other banks to enforce the transfer of risk functions to executives who are not perceived to have a potential conflict of interest.
In December, Standard Chartered, the London-headquartered bank which focuses on faster-growing markets, was asked by the regulator to move oversight of its risk function away from Richard Meddings, the finance director. Mr Meddings has since - in an unrelated restructuring - indicated his intention to leave the bank.
Mr Bostock is a former Santander executive, having spent eight years there and at its predecessor company Abbey National. Until he became RBS' finance director, he was head of restructuring and risk at the taxpayer-backed bank.
The Times reported on Wednesday that Santander UK was under pressure to clarify whether Mr Bostock would receive a bonus for which he would have been eligible at RBS prior to this week's profit warning.
The PRA declined to comment while Santander UK was unavailable for comment.
:: Watch Sky News live on television, on Sky channel 501, Virgin Media channel 602, Freeview channel 82 and Freesat channel 202.