Blow for Santander UK as it faces a reduction in credit rating by Moody's

The British arm of Spanish banking giant Santander yesterdayday suffered a blow as it faced a downgrade by a leading credit-ratings agency.

Moody's warned that it had placed the deposit and debt ratings "on review" because of the pressure on the parent companym, Banco Santander, whose own ratings have already been reduced.

"Santander UK will no longer benefit from any uplift from parental support," said Moody's.

Santander UK, one of the "big five" high street players along with Barclays, HSBC, Lloyds Banking Group and Royal Bank of Scotland, could face higher costs as a result of Moody's decision.

The Spanish group has snapped up a string of British banks including Abbey, Alliance & Leicester, and Bradford & Bingley in recent years during the credit crunch.