James Moore: Santander's not that bad, but it's also not that good

Outlook: Taking of banks, it looks like Santander's off to the sales again. This time it's the Mexican business that's on the block with about a quarter up for sale to outside investors.

Spain's biggest bank is a long way from being a caja, one of country's network of horribly indebted savings banks that are frightening the life out of politicians, regulators and, especially, investors.

But a bit of extra capital certainly wouldn't go amiss and Santander has pulled off the trick of offloading a minority stake in one of its overseas businesses before.

Which raises the question: what about Santander UK? Wasn't it supposed to have been trading on the London Stock Exchange by now?

The trouble is, Ana Botin, who runs the show, thinks it can deliver a return on equity of around 15 per cent. That might be just a tad ambitious. But then again, despite all the political rhetoric, the UK banking market is becoming progressively less competitive. Less competition means more profits and a return on equity that starts to look rather respectable.

Trouble is, the market doesn't believe the hype. Banks in the UK, at best, trade at about 0.7 times their net asset value. And while Santander UK doesn't have some of the really nasty legacy issues that plague some of its competitors it is some way from being the best.

Just look at the complaints numbers. Effective and well-run banks shouldn't inspire that level of annoyance from their customers.

If Santander wants to sell part of its UK business it will have to offload it at a chunky discount to what it is theoretically worth, let alone what Ms Botin and her colleagues think it is worth. And with $4bn from Mexico to fatten its balance sheet Santander simply isn't that desperate. Yet.